There’s no denying that a lot of confusion exists regarding condo insurance policies. Sadly, these are often misinterpreted by unit dwellers, as well as property managers. But the blame doesn’t lie with them (always). Very often, this is owing to a lack of comprehension while drawing up the policies by the insurance providers. According to the Census Bureau, There were only about 5 million condos in the 90s, which has almost doubled in the decades that followed. As managing these multifamily dwellings has gotten difficult, the need for insuring them has grown.
The average annual cost of condo insurance may vary from one state to another. Wisconsin, Utah, North, and South Dakota are some of the states with the cheapest condo insurance values, while Florida, Louisiana, New York, and Oklahoma are others with higher rates. But the price of the insurance cover is not the main concern of condo-dwellers in the US. It’s the understanding of the liabilities as laid out in the master policy and the HO-6 policies that often result in a lack of coverage and costly outcomes in a tough situation.
This is where our approach is a bit different. In addition to providing insurance for our customers, we also own commercial and apartment buildings. We’ve renovated properties and we know exactly what can go wrong. We understand firsthand the many complications that can arise in case of damage, and what protection you need to stave off disaster.
Owing to this extensive experience, we are able to go the extra mile to ensure that the entire building and the applicable individual units are covered in the best way possible.
Let’s give you a glimpse of our careful methods of drawing up condo insurance policies.
What does the condo association’s insurance cover?
In the simplest terms, the condo association’s policy covers the building’s structure and the common areas, like parks, pools, gym areas, auditoriums, and gardens, and so on. It includes both property and liability insurance for the covered areas. This insurance may also cover some portions of the units in the condominium, like the walls, ceilings, floors, and balconies that form a part of the building’s structure, depending on the insurance product you have opted for. However, the association’s coverage doesn’t protect personal belongings and valuable assets inside a unit.
What falls under the unit dweller’s insurance?
The HO-6 or condo-dwellers’ home insurance policy offers personal property and liability coverage along with special coverages regarding home improvement endeavors in the individual condo units. In most cases, anything outside the walls of the unit is protected by the association’s policy, and everything inside the unit is covered by the HO-6 policy. But in order to get a detailed answer, you must refer to the Condo association’s governing documents which will clearly outline each unit owners responsibilities versus the associations responsibilities.
What’s the most common cause of confusion?
The condo dwellers and property managers are often confused about ‘who insures which part of the apartment’. It’s this confusion that creates further trouble when a situation calls for raising a claim. While the condo association insurance is supposed to cover all the common elements and some limited common elements, unit properties, and their improvements, renovations, and betterments generally come under the unit dwellers’ insurance policy.
But there are certain situations when the lines distinguishing these areas overlap and create confusion. In some insurance policies, the associational coverage extends to the unit property, except the personal belongings of the unit dwellers. Then again, some all-inclusive policies also include the improvements and betterments of the unit properties within the association’s responsibilities. Hence, it’s of primary importance that the type of coverage you buy sets out all these conditions and has the exceptions drawn out clearly.
How can we be of help?
While drawing up condo insurance policies, we make sure that the liabilities of the association are mentioned in comprehensive terms to avoid litigation later. We often end up going beyond the standard policies that rarely cover for unprecedented circumstances, e.g. stealing from the board by a unit member. This apart, our carefully tailored services aim to make condo management easier by offering proper documentation like free insurance certificates for each unit -a significant cost saving when you’re managing multiple units.
If the condo owner appoints a third-party association to manage the insurance requirements of the building, we can provide the association with website login information to acquire these certificates for all the unit members, again, free-of-charge. This saves a lot of time and eliminates confusion, as all unit members will have a certificate of insurance to understand their responsibilities and those of the association better. It also enhances the reputation of the property managers, increases their efficiency, and makes them look in tune with the times.
Last but not least, we also provide all the unit members with their HO-6 policies, so that they are aware of their responsibilities and can distinguish between their personal homeowners’ policy and the policies of the association, thus minimizing confusion in the case of an incident.
While drawing up these policies, we make sure that there’s no gap in the coverages and that the HO-6 policies carefully complement the condo association’s insurance, thus ensuring seamless coverage for the entire building and the personal properties of the unit dwellers too.
The condo insurance can work for the condo association as well as all the dwellers when the lines between these two insurance policies are clear and carefully drawn. Numerous factors should be considered while drawing up policies and proper documentation should be provided to each member, as well as the association to understand their responsibilities better. The way we see it, it’s the primary job of the insurance provider to help make management easier.