Countless individuals enjoy living in condos. They love owning their unit while having an association handle all maintenance outside of their unit. This includes insurance, among other things. Condo associations secure a master insurance policy to cover the property as a whole. Although this may seem fairly straightforward, the condo association may question what the policy covers and what it doesn’t.
What This Policy Covers
When securing insurance for condo associations, those responsible for making this purchase need to ensure it provides protection against storms, theft, fire, vandalism, and more. The policy provides liability coverage for the buildings, any common areas, and the property itself.
Protection for the Structure
The association may choose bare walls coverage, which covers anything hidden in the structure unit. If the walls cover it, the policy covers it. This includes the drywall, any insulation, the piping and wiring, and the exterior. It also includes the roofing and the framing. However, certain associations want additional coverage.
When an association chooses single entity coverage, the policy covers the above items and certain fixtures built into the unit. This often includes light fixtures along with finishes. An all-in policy provides the highest level of protection. It covers the items mentioned above and fixtures in each unit. It also safeguards appliances and upgrades made by the owner of the unit.
Common Area Coverage
Shared spaces make up a large portion of a condominium development. Hallways, lobbies, elevators, garages, and general landscaping fall under this category. The master policy covers any damage to these areas.
Workers’ Compensation
Condo associations must hire employees to care for the common areas and assist condo owners. Furthermore, the association needs office workers, marketing professionals, contractors, and more. The policy should include coverage to protect the association if something happens to one of these individuals while performing their work duties.
Flood Insurance
Certain condo associations must invest in flood insurance. However, some associations choose to purchase this protection even when they aren’t in an area prone to floods. In addition, certain lenders require the association to purchase this type of protection as a way of safeguarding their investment in the property.
Auto Insurance
If employees use vehicles in the course of their duties, the association needs commercial auto insurance. This protects the association if a driver of one or more of these vehicles causes an accident. The association won’t be held accountable for any bills up to the amount listed in the policy. In addition, the policy pays if a vehicle is involved in a hit-and-run accident or one with an uninsured driver.
Additional Options
Condo associations may wish to purchase additional coverage. For instance, the association might find they need glass coverage, as condo neighborhoods frequently have large numbers of windows. Consider coverage for damage caused by rain and protection for association personal property, such as furnishings in the clubhouse. These serve as only a few examples of many policies offered today that may benefit a condo association.
Every condo association needs insurance. Although this may appear to be an added expense that hurts condo owners, it only takes one incident for the association and condo owners to know how important the coverage is. One incident could wipe out the association’s budget and leave condo owners responsible for any additional expenses, so purchase this insurance today. It’s one item you won’t regret having.
