If you’re a new condo owner or just want a better understanding of what scenarios a policy helps cover, you may have some questions. We break it down with answers to some frequently asked questions about condo insurance (condo insurance faq).
Both policies extend similar coverage including personal property coverage, liability, and loss of use but where they differ is the dwelling coverage. A standard homeowner’s policy extends coverage to the entire structure and other structures on the premises where is a condo policy only extends coverage to the unit from the drywall in, unless otherwise specified on the association master policy.
A master policy provides coverage to the buildings and common areas with the condo association, this includes clubhouses, pool areas, parks within the community, etc…
In short, yes. Insuring your properties is important regardless if you’re there or not. Disaster strikes when you least expect it and leaving your property uninsured could leave you exposed to a costly loss.
Loss assessment coverage helps protect you from paying out of pocket for damage or liability that exceeds your condominium association master policy limits. Most policies come with a standard limit of $1000 and can be increased as needed. Understanding how much coverage to purchase is based on the condo associations’ master policy and how much coverage they carry. In many cases, an assessment is generally to help pay the condo associations deductible at which their policy kicks in to cover the loss. If there isn’t enough coverage on the master policy to cover the loss, the association may assess the remaining expenses to the condo owners. When purchasing this coverage, it’s important to review the master policy with your agent to determine an adequate coverage limit.
In an unfortunate situation such as this it’s not black & white as to who will foot the bill for repairs. The first step should be making any immediate accommodations necessary to slow or stop any further damage. The next step would be to file a claim with your insurance carrier so they can begin the investigation process. What will occur is the claims adjuster will then investigate the condo association master policy, and contact the insurance carrier of the unit owner above you. If there is any negligence determined by either the condo association or unit owner above you, your carrier will subrogate the loss to the other carrier(s) accordingly.