What is condo owner’s insurance?
March 6, 2008 2 CommentsIn the world of home insurance, you might think co-op or condo owners get it easy. A condo owner usually owns the airspace in his or her home, not the actual structure of the home. A condo owner owns “shares” of the building, like a stockholder, not the individual unit in which he or she lives.
Do you need a condo owner’s insurance policy?
So you might think they can leave worries about damage to the building association and their “master policy,” right? Not necessarily. Condo owners don’t have the same insurance needs as someone who owns four walls outright, and the building’s master policy should cover the external structure or “shell” of the home.
But unit owners also need to purchase a personal condo home owners insurance policy, which is called an HO6 policy. That’s because the building’s master policy does not protect their personal belongings. Furthermore, it may not offer liability coverage within their homes.
Make sure your personal property is covered
Unit owners should check what’s covered in their building’s master policy. You can do this by reading your association bylaws or property lease. The master insurance policy should cover the common areas in the building, like the roof, basement, elevator and walkways.
It is a good idea to take an inventory of everything you own. Make a list, or even better use a video camera to videotape the contents of your home. Short of this walk around with a digital camera and take pictures inside closets, cabinets, drawers, and in all rooms. Store the videotape, pictures, or inventory list “offsite”, so in the event of a total loss you won’t lose the record as well. The inventory will be necessary because your HO-6 policy must have enough coverage to replace your belongings if they are all lost.
Your condo home owners insurance will also provide liability coverage. That way, you will be covered for accidents in the spaces you own. If someone falls and injures himself in your home, for example, your policy would provide liability coverage, not the building policy.
Showcase, Unit Owners
Another little tidbit of information. We recently completed a repair to a home where the rain water gutter located at the fascia on the rear of the house had clogged. This caused water to collect in that area, and water when it sits always finds a way in; over time the rotted out the roof rafters. The home owner filed a claim with her home owner’s insurance company (State Farm). State Farm refused the claim on the basis that the cause was a lack of maintenance. Well this lady was over eighty years old. She certainly was not going to get on a ladder to clean her rain water gutter…no matter.
If you fail to maintain, chances are your claim will be denied.
Excellent point, RW. There are instances where losses are out of our control, but regular preventative maintenance is highly recommended so that instances such as these do not occur. It’s unfortunate that this senior citizen did not have family or friends to help her out and keep an eye on the property for her.