In this article, we will explain why properly insuring Condominiums can be tricky. This article will you understand what an insurance company is responsible for covering for a condo building. Master condo insurance policies also known as condo association insurance can respond differently for insurance coverage limits. The insurance coverage for condos is based on what the association condo bylaws are set.
Listed below are the different categories condo bylaws association can adopt when it comes to insurance coverage.
- “All In – Coverage”
All in means that everything is the responsibility of the association and needs to covered with master insurance policy. The only thing it excludes is the condo owner’s personal property (all condo categories excluded personal property). There are four elements to every condo: common elements, limited common elements, unit property, and unit improvements. These four elements refer to pretty much everything in a condo: furniture, appliances, floors, walls, everything nailed down, and anything that the association provides. Check your condo agreement to find the specifics, but All In policies are supposed to protect all four elements.
- “Bare Walls – Coverage”
Bare Walls means there is limited property coverage for condominium complex. Based on this the association is responsible for the exterior of the condo and common areas. Interior areas of unit owners would not included and the unit owners will be responsible to protect this gap in insurance with a homeowner’s policy. also, some contracts will refer to common areas which could mean common walls of the unit property. Some associations will only cover your walls up to the drywall. The Bare Walls policy is tricky and limited, but not uniform in its limits. Experts recommend getting a legal opinion to help determine what is covered and what is not.
- ‘Original Specifications – Coverage”
Pretty self-explanatory, Original Specifications refers to all the original parts of the condo. This is similar to All In, but the main difference is that it does not cover any improvements made by the unit owner. If you changed out the countertops in your kitchen, the kitchen will be covered, but not the new countertops.
After determining what category your condo associations fall into. The condo association’s master insurance policy will provide associations the insurance protection for all of their potential exposures as described in bylaws.
In addition to a master insurance policy, unit owners can purchase a separate Condo HO-6 insurance policy, also often referred to as homeowners insurance. This policy will help fill in those gaps by providing you personal property coverage and liability coverage that you may need in event of a loss. Your independent insurance agent can help review your condo’s master policy to help you tailor the amount of coverage necessary for your new property. Many condo associations require you to obtain condo ho-6 insurance, as already indicated this provides coverage for items that usually are not covered by your Condo Association Master insurance policy.
In conclusion, while condo unit owner’s insurance is not required by law. However, nowadays most lenders do require this coverage to obtain a mortgage. Also, some condo associations are requiring this coverage to be a unit owner in good standing. Lastly, in the litigious world we live in, it would make sense to protect yourself with an insurance policy against claims brought against you and also have coverage for damage to your property.
Above all, you can count on LoPriore Insurance Agency’s specialized insurance expertise. We can help you in identifying just the right amount of coverage you will need for your condo. If you’re moving into a condo, your first call should be to LoPriore Insurance Agency to discuss your condo ho-6 insurance policy. They can find you a policy that fits your lifestyle and covers all the gaps in your condo’s master policy. They make the process easy and convenient! When you can’t make it to the office, LoPriore Insurance offers e-signatures for policies and even makes house calls! Whatever you might need, LoPriore Insurance can provide it in a way that works for you!