Insuring a condominium is different than insuring a house because
of the way
ownership is structured. A homeowner's policy covers against losses, and
covers only what you own. Since there are areas of common ownership in a
condominium complex, your homeowners association may have a master policy.
The extent of the coverage you buy will depend on what the master policy
covers.
The Policies
The
master policy will usually cover damage to exterior components, such as
the roof, stairways, sidewalks, and basements. Some master policies may
cover the structure of your unit itself, but not any improvements made to
the original design. The key here is to know exactly what the master policy
covers so you can purchase a personal policy that fills in the gaps of the
master coverage. The condo association or co-op board should be able to
provide information about what the master policy covers.
The
standard homeowner's policy for condominiums is called HO-6. It will
likely cover your personal property, shield you and your family from some
types of liability, plus any portion of the unit you own under the terms of
the condominium or cooperative documents.
The
People
A
homeowner's policy for a condominium will primarily cover the person who
owns the policy, usually the person listed on the deed of ownership, and his
or her spouse. It will also cover other users and residents to a lesser
extent through the personal property and liability provisions in the policy.
For instance, the insureds children or someone under 21 in the insureds care
would likely be covered. Employees such as housekeepers may also be covered
against loss of personal property on the premises. And you may also extend
coverage to your guests if you make a request to your insurance company in
advance.
The Provisions
In
general, this policy will cover the costs
• to
rebuild or repair the portion of your unit that you are responsible
for if it is damaged from one or more of the perils listed in the policy,
such as fire, lightning, smoke, vandalism,
etc.
• related to temporary housing if you are
displaced by a qualifying peril, while you wait for repairs or
relocation.
• of replacing personal
belongings.
• of medical treatment
incurred by someone injured on or near your property due to your
negligence.
• the cost of mounting a defense
or paying an award in a lawsuit if you
are found responsible for personal injury or property damage suffered by
another person.
The
Premiums
Just like policies covering
single family homes, the issuing company will
first want to assess what kind of risk you might present. The company will
consider your credit rating, whether you have a criminal record, any
previous addresses, and your history, if any, of insurance claims. Be
prepared to tell the insurer what kind of job you hold, details of your
employment history, your marital status, and your age, among other
facts.
An insurer will also want to know certain information
about your unit. How
many square feet is it? How old is it? Are there any improvements that
wouldnt be covered by the master policy?
Once
the insurer has taken this kind of information into account, it will be
reflected in your rate quote, and its your choice whether to accept,
renegotiate, or look elsewhere for coverage.
© 2003
Emerald Publications
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