Condominium unit owners have the best of both worlds…like a homeowner, they have title to their own unit, and like a tenant, they have access to common property such as the lobby, swimming pool, roof top patio, or other amenities.
We often come across the misconception that a condominium insurance policy is similar to a tenant insurance policy in that it only covers a person’s personal contents and liability. Many unit owners have minimal contents, and therefore feel that an individual condominium insurance policy is not necessary as the condominium corporation covers “everything else”. This is not the case. Condominium insurance policies are actually quite complex and extensive in the coverage they provide.
Firstly, we would like to define what a condominium corporation is, or does. The corporation is responsible for managing operations, business affairs, and property interests of the unit owners. Most condominium corporations will establish a board of directors, set maintenance fees, maintain a reserve fund, hold unit owner’s meetings, and maintain common property.
The condominium corporation’s insurance policy typically covers the following:
- The building
- Common property
- Fixtures built or installed as part of the original or standard construction
- Condominium assets (i.e. common area furniture or equipment)
- Liability of the condominium corporation for claims of property damage or bodily injury suffered by others
A personal condominium insurance policy purchased by a unit owner typically covers the following:
- Personal property (i.e. clothing, appliances and furniture, etc.)
- Additional living expenses, over and above the normal cost of living, in the event of an insured loss
- Personal liability for any bodily injury or property damage unintentionally caused to others where you are found to be negligent
- Upgrades to your unit, known as Betterments and Improvements, made by you or by previous owners of your unit (i.e. custom hardwood flooring, upgraded carpet, custom counter tops, etc.)
- Contingency coverage insures your unit in the event the condominium corporation’s insurance is insufficient or not in force at the time of a loss
- Loss assessment coverage pays your share to cover major property and liability losses on common property that may exceed the condominium corporation’s policy limits as well as any assessments you may receive from the condominium corporation’s policy deductible for an insured loss
It is important to note that under a personal condominium insurance policy the coverage is subject to the limits stated in the policy, as well as the policy deductible.
Should you have any questions regarding condominium insurance policies, or if you would like a complimentary review of your coverage, please do not hesitate to contact us!
Thank you,
The Costen & Associates Team
