To state the obvious, owning a condo is quite different from homeownership. As a result, the insurance needs are also quite different. Condo associations have master policies that are usually responsible for some of the building coverage. As a result, this leaves many people wondering, “Why do I need insurance on my condo, when the association has a master policy?”. Insurance experts Brenda Loiselle-DuClos and Michelle Namaka explain why it is important to have your own condo insurance policy.
- Why do I need Insurance on my condo when the association has a master policy?
The condo association’s master policy does not cover Personal Property or provide Liability protection for the unit owner. Personal property insurance is the type of insurance that protects items in your home such as furniture or clothing.Liability insurance is the coverage that protects you if you or your family member is found legally responsible for injuring someone else or damaging someone else’s property.
So, do I need any building coverage?
Yes, although the amount of building coverage you need depends on the specific bylaws of your condo association. Some condo association’s policies will cover from the “studs out” meaning that their coverage is only responsible for damage done to the unit’s exterior walls. This would leave you responsible for damage done from the “studs in”. It is important to understand what you are responsible for so that you can be properly insured.
Improvements and Betterments:
Some condo association’s policies will only cover the condo as it was originally built. This would mean that if you enhanced your condo (by installing granite countertops, for example) and there was damage, you would not be compensated for these improvements. These improvements can also be added to your personal condo insurance, protecting you if there was ever an incident.
Loss Assessment Coverage:
This additional protection for condo owners is used when there is a loss that exceeds the condo association policy’s limits, a loss that is under the association’s master policy deductible, or a loss to a common area, such as an activity building. In these instances, the association would apply an assessment to each unit owner to absorb the cost. If you have loss assessment coverage on your condo insurance policy, you would be protected.
If you are interested in learning more about condo insurance, feel free to visit our blog for a previous posting: Condo Insurance After A Devasting Fire
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