Condo Insurance 101
Condominium insurance is a widespread source of confusion and dispute. If you are a condominium owner, it is important to understand what is covered by your association’s “master policy” and what gaps in coverage you need to insure. Not all master policies are alike.
As a general matter, the master policy covers the building of which your condominium is a part. The condo association obtains the policy and pays for it with your association dues. It will typically cover common areas you share with other owners in the building, such as the roof, basement, hallways, elevators and the like. The master policy coverage, however, may end where your unit begins, leaving you to cover interior walls, floors, appliances and fixtures. In some instances, the coverage may be more extensive than that. You should review the master policy as well as the condo master deed and association bylaws.
As an owner, you will want a policy of your own for your personal belongings, the portions of your unit that are not insured under the master policy, and personal liability coverage. You may want to consider loss assessment coverage, which kicks in when the association makes a special assessment due to a loss that was not fully covered by the master policy. Other optional coverages you may want to consider include water back up coverage and umbrella liability coverage. Get good advice and understand your coverage before you need it!