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A condominium is not the same thing as a house. Usually, there's no backyard or basement, and you don't have to worry about cutting the grass or shoveling a front walk. Insurance is another area where homes and condos differ. Condo owners are typically responsible for insuring just a portion of their property on their own. Owners of condominium units obviously do not own the entire condominium complex. Typically, they own their own unit outright and share ownership of the rest of the complex with all the other owners. From an insurance point of view, that means all individual unit owners have a collective responsibility for insuring areas of the complex owned in common -- building exteriors and hallways, the pool area, etc. A condominium association typically collects monthly dues from unit owners and uses a portion of these funds to insure common areas. Meanwhile, the unit owner typically is responsible for separately insuring everything within the four walls of his or her individual unit. The condo association's master policy, as well as association rules, should spell out clearly which parts of the complex are insured through association dues, and which parts are not.

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A condominium combines the convenience of apartment living with the investment advantage of ownership. This form of ownership may create some unique insurance challenges. Condominium Owners Insurance policy is specifically designed for individual condominium unit owners. It is for the customer who owns and occupies it at least part of the year a dwelling unit in a structure owned and insured by a Condominium Association, a Town home Association, a Cooperative, a Homeowner Association, a Planned Community or similar types of organizations. In many instances, the condominium association assumes responsibility for insuring certain types of damage to the dwelling structure. When the condominium association insures the structure, a unit owner policy is normally written to cover the unit owner. In other instances, the condominium association does not insure the structure. In this situation, a homeowner’s policy would be written for the unit owner, just as it would be for an insured person with a conventional home.

The Condominium Association Master Policy

It is always advisable to take a policy for the entire building by the Condominium Association themselves. It is so because it can be more efficient or economical. The association may insure all the building and common elements under a single package policy, commonly called an association master policy. The association policy insures the basic building(s) (walls, roof, floors, elevators) but leaves to you the responsibility of insuring appliances, carpeting, cabinets, wall coverings, and other items in your unit, and in some instances the interior walls. It can also Insure both the basic building(s) and the items within your unit other than personal property. further, the condominium association master policy can also insure both basic building(s) and includes unit owner fixtures and improvements.

When the condominium/association insures the structure, a unit owner policy is normally written to cover the unit owner for:

  • Items not covered by the association master policy that may be your insurance responsibility.
  • The value of building additions or alterations made by you, at your expense.
  • Value added (If you've put in a better quality carpet than was originally there, for example, this coverage would make up the difference in case of loss).

Damage to your unit not compensated because of the master policy deductible.

In other instances, the condominium/association does not insure the structure. In this situation, a homeowner's policy would be written for the unit owner, just as it would be for an insured person with a conventional home. Remember, however, that conditions in condominium/ association bylaws and other governing regulations may vary widely. Be certain that your policy covers any potential gaps in the condominium/ association master policy.

Condominium Insurance Update

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Your Personal Property Coverage under Condo Insurance
Because you have a large investment in your personal property, you need enough coverage to compensate you if you suffer a covered loss.
Your condominium unit owners policy will protect your personal property against loss or damage from a number of specified causes, such as:

  • Fire or lightning
  • Weight of ice, snow or sleet
  • Windstorm or hail
  • Theft
  • Accidental discharge or overflow of water
  • Explosion
  • Riot or civil commotion
  • Accidental eruption of hot water heating system
  • Aircraft
  • Vehicle damage
  • Freezing
  • Smoke damage
  • Artificially generated electrical current
  • Vandalism or malicious mischief
  • Falling objects

Your personal property is covered against these kinds of losses both at your residence and any other location worldwide, subject to some restrictions. For example, theft from another residence you own, if you are not temporarily residing there at the time, is not covered.

Guests' property would be covered within your unit.

Most basic coverage for property does
not include flood or earthquake insurance coverage

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