A Guide to Insurance Options for Condo Associations
A shocking 73.9 million Americans now reside in community associations. To get adequate coverage, condo associations and residents need to choose the correct insurance options.
When looking for insurance coverage for a condo association, it can be hard to know which insurance policy to choose. Condo association and unit owner insurance policies are different, and there’s a lot to consider when choosing either option.
Fortunately, we’re here to help clear things up for you. In this guide, we’ll tell you about the different insurance options that are available for condo associations.
What Is a Condo Master Insurance Policy?
A condominium master insurance policy is an insurance policy that covers a condo building. This policy won’t cover the interior spaces of individual condos or the belongings of condo owners. However, it will cover the structure, grounds, and all common areas.
Individuals will need to get individual insurance plans, known as HO-6 insurance policies, for their condos instead. They’ll also be responsible for personal liability coverage.
Owners of condo units in a building will not only have their individual condos. They will also share certain common spaces. The condo association will need to have a master insurance policy to cover these areas.
The specific coverages that master insurance policies include will be pretty similar. However, there are different types of insurance that a condo association can choose. This includes a bare wall policy, a single entity policy, and an all-in policy.
It’s important to understand the master insurance options that are available and the coverage that’s offered by these policies. You should also think about the additional coverages that are needed by the association as well.
Types of Condo Master Insurance Policies
There are three main types of master insurance policies. These each outline the amount of coverage that will be offered when it comes to the structure of a building and individual units. Here are the types of condo master insurance that you should know about.
Bare Wall Policy
A bare wall policy is a limited policy. It includes coverage for the structure, fixtures, and furnishings in a condo building’s common spaces.
This policy also includes exterior coverage up to the drywall. It includes the framing, piping, writing, insulation, and roofing of the condo’s structure. This policy doesn’t cover any interior parts of an individual condo.
Single Entity Policy
Single entity coverage offers protection for all of the exterior items and materials as mentioned in the bare wall policy.
However, a single entity policy will also offer coverage for specific built-in property in a condo unit. This includes any light fixtures and finishes that were initially included when the condo was purchased. It won’t include upgrades or improvements that a condo owner makes.
All-In Policy
This extensive type of master insurance overage will include the exterior of a condo as well as all parts that the unit came with.
This policy provides coverage for lighting fixtures and electrical and plumbing systems. It will also cover cabinets, countertops, and appliances. It also includes additions and upgrades to an individual unit.
What Is Condo Unit Owner’s Insurance?
When discussing master insurance for a condo, it’s also important to understand what a unit owner’s insurance policy is. This type of insurance policy is known as HO-6 insurance.
A master insurance policy will cover the building as well as the common shared spaces that condo owners own together. A unit owner’s insurance policy is for the unit itself. A condo owner will need to take out their own condo unit policy to get the protection that they need.
General condo insurance is very similar to homeowner’s insurance. It will protect a home’s furnishings and the owner’s belongings if anything happens to it. It may also cover liability if a guest is injured while in the condo.
Other Condo Insurance Coverages
Aside from condominium master policies and unit owner’s insurance, you might want to get extra coverage as well. Some of the coverages that you might want to add to a condo policy include the following.
Personal Flood Insurance
Personal flood insurance provides protection from financial loss that’s a result of flood damage.
Flood protection can be purchased as an individual policy or as a master policy for the entire building, but coverage can vary. Typically, an individual policy will be necessary to cover personal belongings, furniture, and household goods.
Directors & Officers (D&O) Liability Insurance
A directors and officers (D&O) liability insurance policy is also worth considering. This policy can protect condo association board members, employees, and community association managers from claims against them.
These claims could come about for many reasons. These individuals could get challenged on decisions or for failing to handle certain responsibilities.
When disputes come up, this type of insurance can provide extra protection.
General Liability Coverage
General liability coverage can protect a party against claims of bodily injury or property damage that may occur. If someone is injured on condo property, then this coverage can protect against lawsuits and claims. If somebody is injured in common areas or on the grounds of a condo property, then the association will be protected.
An individual may also get this type of coverage for their individual condo unit as well. This will help provide protection against claims by other parties.
Umbrella Policy
To add more protection to your condo, you may also want to consider getting an umbrella policy. Umbrella insurance offers liability coverage that extends beyond other condo policy coverage
Umbrella insurance can come in handy when unforeseen circumstances happen. It’s useful to have if you want the highest level of protection.
Choosing the Best Insurance Options for Condo Associations
If you need an insurance policy for condo associations, be sure that you understand the different coverage types available.
Carefully considering your insurance options and making the ideal choice is essential for protecting your condo. It will allow your association to offer the right amount of protection to condo owners.
Need help choosing the perfect insurance policy for your condo building? Contact us today to learn more about how we can help!