Buying a condo may be a terrific option for folks who value community and would rather avoid some of the care and maintenance that comes with owning a house.
But what about condominium insurance policies? Is it your responsibility as an owner, or is it the responsibility of the Homeowners Association (HOA)? What does condo insurance cover, and what does condo association insurance cover?
What exactly is a condominium association insurance policy?
A condo association insurance policy is a master insurance policy held by a homeowners association or condo organization.
It addresses the structure and communal amenities of a condominium complex. Condo association insurance is often a “bare walls” policy. This implies that it covers everything up to the bare walls (such as the drywall, studs, and insulation in your apartment).
A condo association insurance policy may, on occasion, be a “single-entity” or “all-in” coverage. Cabinets, floors, and even built-in appliances may be covered by such insurance. The sort of coverage relies on your HOA and the insurance they’ve obtained, as well as state and local rules and regulations. Furthermore, homeowners associations may opt to obtain extra coverages such as fidelity liability, which protects against fraud or theft, or workers compensation, which might pay the costs if a condo worker is hurt on the job.
Condo insurance vs. condo association insurance
Because the names are so similar, this can be tough, but stick with us. The important issue is that the condo association insurance coverage is handled by your HOA, whilst your individual condo insurance is handled by you.
Condo insurance coverage cover the communal amenities as well as the construction of the condo complex. It covers items like liability insurance, loss of use, personal possessions (in this case, homeowners association property), and structural damage. It is typically funded by HOA membership fees paid by condo unit owners.
Then there’s condo insurance, often known as HO6, which is a form of homeowners insurance coverage that protects your specific unit from the inside out. As part of the condo-buying process, you need obtain your own personal HO6 coverage.
Condo insurance, like other homeowner’s policies, covers personal property, loss of use, personal liability, and medical coverage.
To summarize, a condo association insurance coverage covers items for which you are not liable as a condo unit owner.
- In principle, you are accountable for your own unit: your personal belongings, occasionally portions of its construction, and anything that occurs within it. This is covered under your personal condo insurance policy (HO6).
- Outside of your unit, the HOA is in charge of everything in the condo community. This is where condominium association insurance comes into play.
- What is the scope of a condo association insurance policy?
A condo association insurance coverage often covers the common facilities and public areas of your condo complex, such as pools, tennis courts, and parking garages. It does touch some characteristics of private units on occasion.
The master policy of the association comprises the following provisions:
Liability insurance
This section of the policy is intended to protect the HOA if someone is accidently hurt or harmed within the HOA’s jurisdiction. A condo association insurance policy, for example, will cover legal and medical fees if someone slips and falls on wet tile while strolling around the community swimming pool.
Building destruction
This section of the policy covers property damage to the building structure. A condominium association insurance policy, for example, will cover the cost of replacing a broken lobby window if a large storm sweeps a tree limb into it.
Common locations
The regulation also protects communal spaces against damage, such as the lobby and sporting facilities.