What you need to know about condo insurance

When someone flushes a T-bone steak down the toilet, causing damage to your plumbing system, or when a hurricane sweeps through your area, you can have peace of mind knowing that you are protected. It is comforting to know that there is no replacement for a good insurance policy, even though it is not something anyone enjoys contemplating until it becomes necessary.

The insurance association said that we need information on both articles. Let’s put all of this together to understand why condo insurance is important. First and foremost, it is crucial for us to know about our own personal insurance.

The policies are currently active and the entity responsible for their underwriting, you should have acquired a “certificate of insurance” indicating that once the sale of your condominium unit is finalized, it includes coverage for both property and liability. The insurance provided by the condo association pertains to the shared common areas of the building.

If you do not have an insurance agent, you may want to speak to the agent who handles the association’s policies to find out more about the extent of coverage. In case there is a claim, you will not face a dispute between agents regarding the policies that cover it.

Types of condo insurance

Condo association insurance

Condominium association insurance provides coverage for a diverse range of possibilities. Some of the most prevalent (and crucial) forms of coverage include:

  • Fidelity responsibility: This includes the expenses of embezzlement or theft of funds from the organization by a member of the board.
  • Worker’s compensation insurance: This is in case a volunteer sustains an injury while working on behalf of the organization.
  • Bare walls coverage: As the name implies, this cover is for the basic building structure. This includes walls, floors, roof and elevators.
  • The responsibility for improvements to countertops, floors, or light fixtures within the unit lies with the unit owner. Refurbishments on said finishes are not included in this coverage, which encompasses individual unit finishes excluding the owner’s personal property.
  • One of the most important insurance coverages to include in a condo association’s policy is general liability insurance. This coverage covers the cost of lawsuits that may arise from accidents that happen within the building, such as someone slipping and falling while doing repairs on the property. It can also protect the association from being sued for issues like inadequate security measures, which can result in attacks or burglaries at the owners’ premises.
  • Did you know that there is good news for all board members in the case of mistakes? The Liability Officer’s and Director’s insurance protects all board members in certain scenarios. There are coverages in place to protect against personal liability in lawsuits. Each board member could face personal liability in the lawsuit if they are part of the decision-making committee. Unfortunately, if the board omits a compulsory hand railing or puts a new sidewalk without liability insurance, they could be sued and the community may not be exempt from liability. It doesn’t seem fair that board members can be held liable or sued for making missteps, especially when they are volunteering and doing their best for the community.
  • As an owner of a unit, it is crucial to take into account several significant insurance protections. This brings us to the subsequent segment that addresses the items that the association has already included. If you comprehend what is included in your association’s master insurance policy, you will not be responsible for the expenses related to those items. Furthermore, there is coverage provided for the personal belongings of the association.
  • Owner’s insurance

    Each unit owner needs coverage for their own personal property damage. Appliances and smaller items, such as clothes, that are not covered in the master association’s policy will be replaced and recovered with the help of the policy.

    During the period when your condominium unit is undergoing repairs, an all-inclusive insurance policy will take care of your expenses for accommodation. Additionally, as a result of water damage to your unit, you might face the situation of not having a place to reside for a few months. Instead of opting to return to your parents’ house.

    During your unit’s get-together, if someone were to accidentally break their leg, for example, your personal insurance policy should cover the expenses for their rehabilitation if the victim doesn’t have the funds to pay. Keep in mind that if an injury occurs to a third party within your unit, such as bodily harm or personal liability, the association won’t be responsible for paying.

    Insurance can also assist you in covering deductible expenses if the organization deems you responsible for harm due to carelessness.

    The key point is that, within your personal insurance policy, here’s a breakdown of crucial coverages to incorporate. As a proprietor, it is advisable to acquire personal dwelling insurance that complements the insurance policy of the association for shared spaces. The main point is.

  • Replacement cost coverage should still be obtained, even if the association has flood insurance, as it provides protection for the condo unit and its contents in the event of damage caused by floods, earthquakes, or hurricanes.
  • When facing a loss, such as a loss due to special assessments or additional liability coverage, it is important to assess the coverage provided by your insurance association. This is because if someone successfully sues the association and the loss is not fully covered by the association’s insurance, you may face more liability than your share of the coverage. Additionally, it is important to consider any special requests association may have when determining the coverage.
  • If you are the owner of a second or third unit in a condo, talk to your agent about improvements and enhancements for future renovations such as cabinets, carpeting, fixtures, and overall coverage enhancements.
  • Liability coverage: You’ll also be grateful for obtaining liability insurance to protect against any accidents that occur within your unit.
  • Make sure you possess backup insurance for sewers and drains, along with additional protection for the shattering of glass with a deductible of zero dollars.
  • If you own a condominium unit and live in it, you should consider looking into an HO6A or HO6 insurance policy, which typically starts with a designation of “OTHERS” for those who need an endorsement from a renter.

    Are you sure to make sure that your policy is not a type of “all-risk” but rather a policy that names specific perils? It is very important to do this if you have upgraded items inside your home. Make sure to clarify that the limits for personal property and property are only estimated and not actual.

    Do you know that water damage is one of the largest claims in condominium buildings? Research shows that deductibles for water damage claims can go up to a whopping $100,000! That’s why condo owners are advised to educate their tenants on preventative measures that can help reduce the number of water damage claims. Condo boards are going to assess a special operating account to cover the cost, so it’s important for owners to have the kind of money that doesn’t have a condo.

    Frequently asked questions about condo association insurance

    What factors should a board take into account when employing an insurance intermediary?

    If your broker doesn’t ask you to review your bylaws, it may be a red flag because there might be additional insurance requirements outlined in your bylaws. Brokers should specialize in condominiums and be familiar with other regulations and laws that pertain to condo properties.

    It’s also crucial to employ a broker who is well-versed in the claims procedure because condos have a distinctive claims process.

    In order to minimize the possibility of a loss, the board could engage in various activities to furnish you with risk management recommendations. It is crucial to adopt a proactive approach when choosing an insurance broker and coverage policy.

    Some of the crucial inquiries to pose when seeking to employ a broker comprise:

  • Does your broker only give you a policy and a premium once a year?
  • What other methods are they employing to educate you on the inner workings of the insurance sector?
  • What other activities are they undertaking to offer you with advice on managing risks?
  • Can they assist you in diminishing the intensity and frequency of damage?
  • What are the largest errors condominium boards commit when purchasing insurance?

    A lot of boards will move their insurance policy from one insurance company to another without understanding that the policies can look the same on the surface with features like crime coverage, property coverage, general liability coverage, etc., But the language that determines if you’re fully indemnified in the event of loss can be quite different, as well as the exclusions, terms, and definitions.

    For example, crime insurance may not provide coverage for deceptive actions carried out by the board members or property managers.

    For optimal outcomes, it is recommended to invite different brokers to present the coverage details and benefits of each policy at various times to the board. When obtaining quotes from multiple brokers, it is advisable to have each of them explain the coverage extensively, particularly for condo associations.

    How frequently should the board of the association evaluate its insurance policy?

    The board needs to perform an annual review of the insurance policy to ensure that there are no changes in the operations and property coverage mentioned.

    The insurance agent must also transmit recent bylaw modifications to the organization, as neglecting to do so might have an adverse impact on the organization’s insurance coverage.

    What steps should a condominium board take prior to submitting a claim?

    The first thing the fire department needs to do is be more proactive rather than reactive when it comes to their goal of mitigating loss, which means shutting off the water and breaking pipes if there’s a fire.

    If the emergency includes any damaged elements, then retain the damaged section in the event that you need to pursue responsibility.

    To circumvent this, it’s crucial to identify someone to hold accountable for something, as it is inherent to human behavior. Rather than accusing and assigning fault, it is advisable to investigate the circumstances. The board ought to abstain from assigning blame for the loss, above all.

    As soon as the board receives a statement of claim, they must promptly forward it to the insurance company. Subsequently, the insurance company is granted sufficient time to conduct their necessary investigations, collect evidence, and provide a response to the claim.

    In order to aid you in minimizing your damages, it is crucial for organizations to create a contingency plan so that you are aware of the appropriate experts to contact during an emergency in the foreseeable future.

    Emergencies can be extremely tense and an emergency preparedness strategy can facilitate the process.

    Who is accountable for any harm that occurs within a unit?

    It depends on the bylaws of the specific condominium association as to the responsibilities and duties they have to repair the property and act as insurance policy. The association is responsible for maintaining and placing insurance on the common property according to the property condominium act.

    It is the responsibility of the association to repair it, even if the damage is below the deductible. It is also important to refer to your local regulations to see what they say about this issue, as it differs from province to province.

    Can the organization or committee impose a fee on a homeowner to cover the deductible following the repair of the damage?

    Unless the association bylaws state otherwise, the deductible cannot be charged if the association fails to prove negligence on behalf of the unit owner.

    If the association’s bylaws do not address the issue, they are not able to reimburse the deductible. However, in cases where damage or loss occurs within the unit, certain bylaws permit the association to impose the deductible without any restrictions.

    Conclusion

    The pool, lift, outdoor area, fitness center, and so on, jointly own communal spaces with all the other proprietors. This encompasses the exterior of your residence if you reside in a condominium managed by an association.

    In periods of turmoil, each condominium association requires a foolproof insurance plan to encompass the expenses of renovations and fixes. Due to unforeseen mishaps and occurrences, occasionally they can sustain damage. Normal usage and deterioration lead to the decline of these areas as time passes.