Wednesday, August 17, 2011
As many of us consider downsizing, condominiums or co-ops may become an attractive alternative to the responsibilities that go along with single-family home ownership. But sometimes questions arise with regard to responsibility for and ownership of various parts of the property. Obviously, you — the unit owner — own your personal property, like your sofa and bedroom dresser. But what about the interior walls, plumbing and other parts of the property? Those questions often lead to concerns about insurance. How do you know what insurance you need?
Who owns what?
When a condominium or co-op is being built, the developer creates a declaration that provides the organizational structure. This declaration usually becomes the guiding document for the association and each unit owner because it outlines the common elements — parts of the property owned and shared among all unit owners — that are the association’s responsibility. The association normally obtains an insurance policy to cover association property and liability. As the unit owner, you buy insurance to cover your personal property and liability, as well as building property that’s defined as part of the condominium unit and for which you’re responsible under your association’s documents.
The “association policy” — Sometimes called the “master policy,” this is provided by the condo/co-op board, and generally insures the common areas for both liability and property damage — the roof, basement, elevator, boiler, pool and walkways, for instance.
Your individual condo policy — This covers your personal possessions and provides additional living expenses in the event your unit becomes uninhabitable due to damage caused by fire, tornado or other covered loss. Typically, your policy would include personal liability, unit owner’s building property and loss assessment coverage as well.
Let’s work together
Insurance coverage for condo or co-op owners can get complicated, so call me. I can answer your questions about the condo policy, explain coverage provisions and identify discounts for which you may qualify and deductibles you may choose. And if you’re sticking with your single-family home — or if you rent — I can help you with that as well. Forward this to someone you know — I can help them, too.