Condo

Condos are a specialized policy, and if you aren’t careful you can be way underinsured or over insured. Most insurance agencies make assumptions about what is and what isn’t covered by your Master Association’s insurance policy. They have one train of thought about these types of policies and keep spitting out the same policy time after time without asking the appropriate questions. The fact of the matter is that the only way, and I mean the only way to know what you are responsible for insuring and what the Master Association is responsible for insuring is to look at the Insurance Section of the By-laws. The Insurance Section of the Master Association’s By-laws spell out exactly what they are responsible for insuring. Only with looking at that section will you know what you are responsible for insuring. Keep in mind that “responsible for maintaining” and “responsible for insuring” are two separate things and addressed in two separate parts of the Master Association’s documents. We are only concerned with what the Insurance Section of the By-laws states. There are basically 3 different scenarios for your responsibility to insure the condo. They are as follows:

  • Most Popular Way- You are responsible for insuring ONLY betterments and improvements made to the unit since it was originally constructed by the developer and the association is responsible for insuring it the way it was originally presented for sale including heating and air, bathroom fixtures, flooring, cabinets etc. To illustrate this point, let me provide an example. If the unit was originally constructed with an unfinished basement and since that time you finished it off, the association is responsible for insuring the unfinished basement and you are responsible for insuring the cost to finish it. If builders grade carpet was originally installed and you upgraded to hardwood flooring, the association would insure it for the cost to put builder’s grade carpeting back in and all you are responsible for insuring is the difference in cost between your hardwood flooring and the builder’s grade carpet. In this instance, if you are insuring the unit for the full cost to replace the interior then you are grossly overinsured.
  • 2nd Most Popular Way - You are responsible for insuring the wall coverings (paint and wall paper), floorings, cabinets, fixtures inward while the association is responsible for insuring the exterior of the structure. In this instance, if you are only insuring the betterments and improvements then you are grossly underinsured.
  • Very Rarely Seen - The third way is where the association is responsible for insuring the units for the cost to replace them at the time of loss including betterments and improvements which means you have no obligation to insure any of the dwelling.

If your insurance agent didn’t ask you to get them a copy of the Insurance Section of the By-laws for your Master Association, then he really doesn’t know if he insured you correctly or not. You could be over insured, underinsured or just right. But why wait until a claim occurs to find out?

Call our office today for a free quote.

See below for many of the coverages we provide.

  • Dwelling
  • Betterments and Improvements
  • Personal Property
  • Other Structures
  • Liability
  • Ordinance or Law
  • Earthquake
  • Equipment Breakdown
  • Water Backup
  • Personal Injury
  • Identity Theft
  • Loss Assessment
  • Medical Payments
  • Flood
  • Jewelry, Watches, Furs
  • Guns
  • Valuables and Collectibles
  • Replacement Cost
  • Better Roof Replacement
  • Special Personal Property
  • Replacement Cost

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