Why should a unit owner carry insurance coverage if the Association has a Master Policy?
Individual owners have certain exposures that the Association Master Policy DOES NOT cover.
Below we show the basic coverages that every unit owner should consider. This coverage is offered by a number of different insurers and is often referred to as a “Condo Owners Policy” or “HO6”.
- Personal Property Coverage – This section of the individual unit owner’s policy protects your personal property within your home, such as electronics, clothing &; furniture, from damage or loss caused by specific perils.
- Building Property Coverage - This portion of the individual unit owner’s policy protects certain structural features of your unit; such as interior fixtures, floor coverings, built in appliances, cabinets, and countertops. In some cases, these items may be covered under the Master Policy. It is very important for you to know if coverage is extended under the Association’s Master Policy.
- Personal Liability Coverage – Provides coverage for bodily injury or property damage for which you may be held legally responsible. This could involve occurrences inside your residence as well as incidents arising from your personal activities.
- Additional Living Expense – Intended to cover expenses accrued if your unit becomes unlivable due to a covered loss. Payments could be made for housing, eating expenses, etc. There is normally a time and dollar limitation set for this coverage.
- Loss Assessment Coverage - This portion of the individual unit owner’s policy covers your share of an assessment made for bodily injury or property damage for which your Association’s policy either doesn’t provide coverage or is under-insured for such loss. It is important to know that this coverage will seldom respond to assessments made for capital improvements such as re-roofing, painting, or re-paving.
It should be noted that the Master Insurance Policy will most likely have a fairly large deductible for any type of property damage. In many cases, any owner making a claim against the Master Policy will be responsible for that deductible amount. Your individual agent/broker should be consulted about protection to cover this potential exposure.
This is only a general description of coverage and does not include all policy conditions, limitations, and exclusions.
There are many insurers offering this type of coverage and not all coverages and terms are the same.
Please feel free to contact us with any questions.
280 N. Westlake Blvd., Ste. 200, Westlake Village, CA 91362 – Ph: (805)379-5159 – Fax: (805)495-2494 – License #: 0484756