When purchasing a condo, insurance is a must-have requirement. The bank needs protection for its investment in your property, and your condo agreement will also require insurance. Two policies are necessary to fully insure both parties—an individual policy and a master policy. The individual policy covers liability, personal belongings, and apartment structural elements that are not covered by the master policy. The master policy covers shared building structures. Gain a clear understanding of these policies to ensure optimal protection for yourself and the building.
The master condo policy
The building management is responsible for it, and its premiums come out of your maintenance fee or association dues. The master policy covers common areas like the roof, basement, elevator, boiler, and walkways for both liability and physical damage, which are shared with others in your building.
Depending on the association, you may or may not be responsible for insuring the individual condo or co-op units. In some cases, the association ensures the units as they were originally built, including standard fixtures. This means owners are only responsible for any alterations or remodels. In other cases, owners are responsible for elements like kitchen cabinets, built-in appliances, plumbing, wiring, bathroom fixtures, etc.
Knowing which parts of your home are covered by the master policy is crucial for insuring your condominium through your individual policy. This information is often in your association’s bylaws and proprietary lease, which can be obtained from the co-op or condo board or building management.
Your individual condo insurance policy
To protect the value of your condo unit, your lender and by-laws will require you to have your own insurance in addition to the master policy. This individual policy will cover your personal possessions and any structural elements not included in the master policy, should you experience a disaster such as fire or theft. It also provides liability and additional living expenses (ALE) protection, like a homeowners policy.
To ensure you find the best coverage, seek out an insurance professional with expertise in condos. When selecting a policy, ask about potential discounts, like for extra security measures and fire alarm systems. Insuring your unit with the same company as your building's policy may also lead to lower premiums. Safeguard your investment with the right insurance coverage.
- Unit assessment: Get reimbursed for your portion of shared assessment fees resulting from a covered loss, such as a lobby fire.
- Water backup: Protect your property from damage caused by sewer or drain backups that aren't typically covered by condo or flood policies.
- Umbrella liability: Enjoy broader liability coverage and added protection at an affordable cost.
- Flood or earthquake insurance: If you live in an area prone to natural disasters, consider getting extra coverage for peace of mind.
- Floater insurance: Safeguard your valuable jewelry, furs, or collectibles with additional coverage.
