CONDOMINIUM &
CO-OP INSURANCE

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Condominium & Co-Op Insurance

The purchase of a condominium or co-op presents the buyer with both traditional loss exposures as well as exposures unique to this type of property ownership. This applies to units purchased for occupancy and units purchased for investment and rental income. Many buyers falsely assume that the Condominium Association or Co-op Corporation or its Board purchases all the insurance coverage necessary to protect the individual unit owners. We will briefly describe the coverage purchased by the association or board and what it does not cover. A condo unit owner’s or co-op unit policy purchased by you as a unit owner/occupant is designed to provide coverage for many of the exposures to loss not addressed by the Association or Co-op Corporation's coverage.

The association or board oversees the purchase of insurance covering the physical damage to the buildings within the complex. Coverage under this policy may include coverage for your complete unit or it may only cover up to and including the unfinished interior surfaces of your unit (check with your association or board for the specifics of their coverage). You may be responsible for all the property that exists within the unfinished interior surfaces of your unit. In other words, everything on the interior side of the walls (and including the paint or wallpaper) of your unit. This includes your furniture, clothing and other personal articles that can be covered under the condo unit owner’s or co-up unit policy you purchase.

The association or board may also require you to be responsible for repairing or replacing windows, doors, floor coverings, kitchen cabinets, and appliances in your unit. The by-laws of your particular association or board identify your specific responsibility and should be reviewed. You will also need to insure any additions and alterations made to your specific unit whether made by you or the preceding owners of your unit. All these items can be insured under the condo unit owners insurance. The association or corporation policy does not provide coverage for any necessary increase in living expense incurred by you, as a resident, if your unit becomes unfit for normal use due to a covered loss such as a fire. Likewise it does not pay for your loss of rental income if your tenant moves out due to a covered loss.

Personal Liability for suits alleging bodily injury or property damage is the largest exposure you face as a condo unit owner. The association or corporation insurance coverage typically protects the unit owners from suits arising from the common areas such as halls, grounds, parking lots etc. Your condo unit owner’s policy can provide liability coverage for claims arising out of the use and occupancy of your unit. Personal Umbrella Liability policies can provide excess liability limits over and above your condo unit owner’s liability limit.

Finally, you can be assessed for a variety of reasons. One such reason is a direct physical loss to property owned by all owners or a liability suit resulting in a loss which is not covered by the association or co-op corporation insurance. Such an assessment can be covered under loss assessment coverage of the condo or co-op unit policy you purchase provided the actual cause of loss is covered by your condo/co-op unit policy.

The condo/co-op unit policy is designed to dovetail with the Condo Association/Co-op corporation policy with little duplication of coverage. A condo/co-op unit policy starts at about $200 depending on the coverage and limits you desire.