Massachusetts Condo Master Insurance
When it comes to insurance on a condominium complex, there is more than the building to think about. Protecting common areas shared by unit owners and the exterior of the building are important responsibilities. However, it’s tough to find the right amount of coverage at a price you can afford. LoPriore can help you build a policy that works for you and your unique situation.
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What is condo master insurance?
Condo master insurance policies protect a condo’s exterior and, sometimes, portions of the interior. It also provides liability coverage for accidents and injuries that occur in the common areas of the condominium.
A master insurance policy helps maintain the shared spaces in a condo complex, but having one in place does not mean that unit owners do not need to get their own policies. Condominium unit owners face just as much risk as homeowners, but they may have different insurance needs based on what the association covers in the master policy.
These policies offer limited coverage of the overall condo structure and building, both the interior and exterior spaces, but not the individual units. It is designed to protect the limited common areas that unit owners share, but since it does not cover the units themselves, unit owners will need to get their own insurance to protect their personal belongings.
Typically, the master policy will be held by the homeowner’s association (HOA) or condominium board since it protects all unit owners. It will be used to pay for damage or liability issues that may arise within the condo’s shared areas. Having this policy in place also allows tenants to gauge the amount of coverage they need for their personal homeowner’s insurance.
Why do I need it?
Insurance policies carried by condominium unit owners don’t provide coverage for the outside of the building or liability coverage for accidents in common areas. Additionally, lenders for each condo unit often require this coverage as a clause in terms of the mortgage.
All condominium and co-op associations need to protect both the association and unit owners’ interests by providing both property and liability coverage for the building. Contrary to most other insurance policies, a condo master policy is handled by the condo association rather than the individual unit owners.
Regardless of how many unit owners are in a specific condo complex, the condo association will need to get a master insurance policy to protect the building in case of disaster or loss. The master policy acts as collective insurance that covers all unit owners’ shared risks, so it is to be held by the association.
What specifically does it cover?
Typically, this form of insurance offers three levels of property coverage.
- Bare Walls-In Coverage
The bare walls-in policy focuses more on the condo’s exterior framing and any structure or property within that area, such as roofing, piping, or insulation. Thus, it does not cover interior fixtures, lighting, or other installations within the condo building. It is considered the least inclusive master policy that poses a need for unit owners to purchase more condo insurance for their personal belongings.
- Single Entity Coverage
Single-entity coverage covers basic elements, such as walls, floors, roof, and standard furnishing in each unit. It does not cover for upgrades or improvements made by the unit owner or their personal property. These two things will have to be covered by the unit owner’s personal condo insurance.
- All-In Coverage
The all-in policy covers the interior part of the condo, including any fixtures, installations, and additions that may have been made to the walls or floors. It may also cover built-in appliances in each unit and any improvements made at the unit owner’s expense.
Since this policy is much more comprehensive than the other two types, it usually requires less coverage needs for the individual unit owners. All-in policies also cover upgraded fixtures and finishes, so owners will usually need to purchase condo insurance only for personal belongings
Aside from property coverage, a condo association master insurance policy also offers liability insurance to protect the association from potential lawsuits. The general liability coverage can help pay for medical or legal expenses that may arise from accidents and injuries within the condo complex. This is particularly important if the condo has amenities like pools or fitness centers, which can pose a risk for bodily injuries.
Like other insurance policies, master condo insurance in Massachusetts may also come with optional enhancements and additions to make the insurance package more comprehensive.
- Commercial Property Coverage: This is protection for loss or damage to real property (land and buildings) or personal property (everything else). It requires a deductible upon filing a claim.
- Buildings and Business Personal Property: Building coverage describes coverage for the actual building, completed additions, outdoor structures, permanently installed fixtures and equipment, and machinery.
- Employee Dishonesty Coverage: This optional coverage protects against financial or property loss due to employees’ fraudulent acts
- Inland Marine Insurance: This optional coverage protects the property in transit and property of others left in your care, contractor’s equipment, and other property not usually found at a fixed location.
- Commercial General Liability Coverages: Liability coverage protects against bodily injury or property damage for which you’re legally responsible. Coverage for liability arising from personal injury and advertising injury, medical expenses, accidents occurring on the premises or away from the premises and products or completed operations, Legal defense costs may also be covered.
- Medical payments: Payments for medical expenses due to accidents on the premises are covered regardless of the insured’s liability.
- Fire Damage Limit: This coverage pays for claims related to fire damage to rented premises caused by an insured’s negligence.
- Commercial Umbrella: This additional layer of coverage provides excess liability coverage beyond the limits of your underlying policies. It is important to remember that underlying policies must be in force for umbrella coverage to be valid.
- Lastly, Directors and Officers Liability: This optional coverage protects high-level employees or trustees against claims from stockholders, employees, and clients.
Coverage Enhancements and Endorsements
- Equipment Breakdown: This optional coverage protects all electrical systems not covered by other policies, including computer and telephone systems.
- Business Income and Extra Expense: When damages are severe enough to interrupt business, this coverage supplies funds for lost income and the extra expenses of running the business while damaged.
- Law and Ordinance: When a building is substantially damaged, local ordinances may require a rebuild to meet current local building codes. Coverages may include the cost of demolition, debris removal, and increased construction cost per building code.
- Water Backup of Sewers and Drains: This optional add-on coverage protects from water damages caused by a backed-up drain or sump pump.
- Blanket Insurance: This supplies coverage for multiple properties up to an agreed-upon limit for all scheduled locations.
- Lastly, Flood and Earthquake: This optional coverage is not included in standard policies. However, it’s available as buyback coverage and is priced according to requested limits.
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Frequently Asked Questions About Condo Master Insurance
There are many factors involved in determining policy costs, including:
• Coverages required by the bylaws of the association
• The amount of coverage on the building and the deductible amount
• Lastly, the type of building construction, whether the building is updated to meet current building codes, and if sprinklers are installed
The master policy covers common areas used by multiple unit owners including outdoor spaces (like parks, pools, parking lots, and walkways) and indoor spaces (like a gym, event space, and the association’s office). Beyond that, the amount of coverage supplied by master security policies can vary widely. Some policies cover the interior of the units, employee dishonesty, sewer/water back-up and additional optional risks, while others only provide protection for shared areas.
Sometimes called All-in, this optional coverage provides protection for the interior surfaces of the units. Coverage included fixtures and installations and may extend coverage to built-in appliances that come with the unit. Conversely, bare walls coverage focuses on the structure of the building, only covering individual units from the drywall out.
It’s important to understand that this condo master insurance policy does not cover owners’ possessions. Typically, a master policy covers permanently installed fixtures, built-in appliances, and machinery that maintains the premises.
Typically, a master policy has a deductible that is divided among the group of all condo unit owners. Deductibles usually start at $500 and are directly related to the cost of your premium.
How much do master condo insurance policies cost in Massachusetts?
Since all the unit owners share condominium insurance in Massachusetts, the deductibles are also paid among all of them. That said, the cost will vary based on factors like the coverage required by the association’s bylaws, the type of building, where the building is located, and such.
A general master policy with $1 million to $2 million of coverage can range from $684 to $948 annually. However, this price can still vary based on your city and state, so it will be best to get in touch with one of our independent insurance agents to help you get a more accurate condo master quote for your desired situation.
Why choose LoPriore?
There are several key factors to consider when choosing a rental insurance provider – their financial strength, value for money, and customer service. We go above and beyond on all three of these qualities. When you choose LoPriore insurance, you’re choosing veterans in the industry with the best policies at the best prices.
Learn more about condo master insurance policies
A condo master insurance policy is an important part of protecting condo unit owners from potential risks. Thus, to learn more about the insurance coverage you need for condominiums, get in touch today. Our experienced agents are standing by to answer your questions, provide a quick quote, or help you build a custom insurance package to meet your unique needs and budget.
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