If you have purchased a condo or co-op, the bank will require
insurance to protect its investment in your home. You may, however, need
more insurance to cover your personal items, liability or fees that may
be charged to you regarding shared areas of the building like the
lobby.
You will need two separate policies to protect your investment:
- Your own insurance policy.
This provides coverage for your personal possessions, structural
improvements to your apartment and additional living expenses if you are
the victim of fire, theft or other disaster listed in your policy. You
also get liability protection.
- A "master policy" provided by the condo/co-op board.
This covers the common areas you share with others in your building
like the roof, basement, elevator, boiler and walkways for both
liability and physical damage.
To adequately insure your apartment, it is important to know which
structural parts of your home are covered by the condo/co-op association
and which are not. You can do this by reading your association’s bylaws
and/or proprietary lease. If you have questions, talk to your condo
association, insurance professional or family attorney.
Sometimes the association is responsible for insuring the individual
condo or co-op units, as they were originally built, including standard
fixtures. The individual owner, in this case, is only responsible for
alterations to the original structure of the apartment, like remodeling
the kitchen or bathtub. Sometimes this includes not only improvements
you make, but those made by previous owners.
In other situations, the condo/co-op association is responsible only for
insuring the bare walls, floor and ceiling. The owner must insure
kitchen cabinets, built-in appliances, plumbing, wiring, bathroom
fixtures etc.
Also ask your insurance professional about the following additional coverages:
- Unit assessment
This reimburses you for your share of an assessment charged to all
unit owners as a result of a covered loss. For instance, if there is a
fire in the lobby, all the unit owners are charged the cost of repairing
the loss.
- Water back-up
This insures your property for damage by the back-up of sewers or
drains. Water back-up may not always be included in a policy. Check to
see that it is included.
- Umbrella liability
This is an inexpensive way to get more liability protection and
broader coverage than is included in a standard condo/co-op policy.
- Flood or earthquake
If you live in an area prone to these disasters, you will need to
purchase seperate flood and earthquake policies. Flood insurance is
available through FEMA's National Flood Insurance Program. Both flood and earthquake insurance can be purchased through your insurance agent.
- Floater or endorsement
If you own expensive jewelry, furs or collectibles, you might
consider getting additional coverage since there is generally a $1,000
to $2,000 limit for theft of jewelry on a standard policy.
When purchasing insurance, it is important to find an agent or company
that specializes in condominiums or co-ops. Also don’t forget to ask
about all available discounts. You can reduce your rates by raising your
deductibles and by installing a smoke and fire alarm system that rings
at an outside service. If you insure your unit with the same company
that underwrites your building’s insurance policy, you might also get an
additional reduction in premiumsIf you have purchased a condo or co-op, the bank will require
insurance to protect its investment in your home. You may, however, need
more insurance to cover your personal items, liability or fees that may
be charged to you regarding shared areas of the building like the
lobby.
You will need two separate policies to protect your investment:
- Your own insurance policy.
This provides coverage for your personal possessions, structural
improvements to your apartment and additional living expenses if you are
the victim of fire, theft or other disaster listed in your policy. You
also get liability protection.
- A "master policy" provided by the condo/co-op board.
This covers the common areas you share with others in your building
like the roof, basement, elevator, boiler and walkways for both
liability and physical damage.
To adequately insure your apartment, it is important to know which
structural parts of your home are covered by the condo/co-op association
and which are not. You can do this by reading your association’s bylaws
and/or proprietary lease. If you have questions, talk to your condo
association, insurance professional or family attorney.
Sometimes the association is responsible for insuring the individual
condo or co-op units, as they were originally built, including standard
fixtures. The individual owner, in this case, is only responsible for
alterations to the original structure of the apartment, like remodeling
the kitchen or bathtub. Sometimes this includes not only improvements
you make, but those made by previous owners.
In other situations, the condo/co-op association is responsible only for
insuring the bare walls, floor and ceiling. The owner must insure
kitchen cabinets, built-in appliances, plumbing, wiring, bathroom
fixtures etc.
Also ask your insurance professional about the following additional coverages:
- Unit assessment
This reimburses you for your share of an assessment charged to all
unit owners as a result of a covered loss. For instance, if there is a
fire in the lobby, all the unit owners are charged the cost of repairing
the loss.
- Water back-up
This insures your property for damage by the back-up of sewers or
drains. Water back-up may not always be included in a policy. Check to
see that it is included.
- Umbrella liability
This is an inexpensive way to get more liability protection and
broader coverage than is included in a standard condo/co-op policy.
- Flood or earthquake
If you live in an area prone to these disasters, you will need to
purchase seperate flood and earthquake policies. Flood insurance is
available through FEMA's National Flood Insurance Program. Both flood and earthquake insurance can be purchased through your insurance agent.
- Floater or endorsement
If you own expensive jewelry, furs or collectibles, you might
consider getting additional coverage since there is generally a $1,000
to $2,000 limit for theft of jewelry on a standard policy.
When purchasing insurance, it is important to find an agent or company
that specializes in condominiums or co-ops. Also don’t forget to ask
about all available discounts. You can reduce your rates by raising your
deductibles and by installing a smoke and fire alarm system that rings
at an outside service. If you insure your unit with the same company
that underwrites your building’s insurance policy, you might also get an
additional reduction in premiums.
