Condominium insurance provides coverage for your unit where your condominium association insurance stops. Your association typically insures the building and other common areas.
You are responsible for the interior of your unit. Typically you need personal property and liability coverage in addition to coverage for your floors, walls, cabinets and fixtures that your association’s insurance probably will not cover.
Every association’s insurance policy is different regarding what each unit owner is responsible for, so it is important to review your association policy and condominium by-laws carefully.
1). Why do I need a condo unit owners policy?
There are many reasons why owners of condos need a condo unit-owner’s policy (HO-6 policy). Coverage for the unit owners personal property, personal liability, and improvements to their units are a few of the reasons. Unit owners policies provide full & comprehensive coverage for the “interior shell” of the unit. The unit owners policy typically provides coverage for items the association will not cover.
2). I thought that part of my condo fees pay for insurance – what does that cover?
Part of the condo fees you pay to your association go to pay for the cost of the “master insurance policy.” This is the policy the association purchases to protect the interests of the association. The master policy (in most cases) provides coverage for the exterior structure of the building(s) as well as interior fixtures that were original to the building. The master policy also protects the liability interest of the association in the event of a lawsuit.
3). I’ve done some upgrades to my unit – are they covered by the association’s master policy?
Generally no. The association’s master insurance policy will only provide coverage for fixtures that were original to the building when it was built. So, if you have put in new hardwood flooring, granite countertops, new cabinets, etc. – these items will generally not be covered by the association’s master policy. Unit owners need to have a unit-owners policy to ensure the upgrades they completed are fully protected.
4). A pipe in my wall burst and flooded my unit. I need to move out and live elsewhere while my unit is being repaired – am I covered?
A condo unit owners policy provides coverage for “additional living expenses” (sometimes referred to as “loss of use” coverage. This would cover the additional costs incurred as a result of being displaced from your unit. Example – your unit is impacted by a burst pipe in the wall. You have to move out of your unit for 3 months while the repairs are made. The cost to rent an apartment (or similar unit) for 3 months would be covered under the “loss of use” section of the unit owners policy.
5). Are my personal belongings covered by the association’s master policy?
No. The only way to ensure coverage for your personal belongings is by purchasing a unit owners policy (HO-6 policy).
6). If I accidentally start a fire and it damages other units in my building – am I covered?
This is a classic “personal liability” type scenario. If negligence can be shown, you may be held liable for the damage caused by the fire. A condo unit owners policy will typically contain personal liability coverage which may protect you in an event of this nature. This is a very important coverage and we will work with you to make sure you have adequate protection in place.
7). I have a unit that I rent to a tenant – do I still need a unit owners policy?
Yes. Tenant-occupied units need to be covered by a unit-owners policy. At Spicer Insurance, we have a policy specifically designed for tenant-occupied condo units. How is this policy different from a traditional (owner-occupied) unit owners policy? – it provides coverage for rental income.
Example: A fire displaces your tenant from the unit for a period of six (6) months. As a result, the tenant has stopped paying rent and you have lost six (6) months of rental income. At Spicer Insurance – our unit owners (landlord) policy will provide full rental income coverage during the tenant’s displacement – up to twelve (12) months.
8). How do I know if I’m responsible for something or if the association will be responsible?
Generally, the bylaws of the association will outline when the association is responsible and when the unit owner is responsible. Every association is different and the bylaws should be read over carefully. At Spicer Insurance we are very familiar with local associations and we know exactly what to look for. If you provide us a copy of your association’s bylaws we will look them over and customize a policy that’s right for you.
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