General Information About Condominium Insurance
Information for the condominium UNIT owner
While the Association may be responsible for protecting the common or limited elements, you as a unit owner may need to protect your individual interests. There are five basic coverages that every unit owner needs to consider to safeguard themselves against potential loss.
Contents or Personal Property
Contents usually include such items as: Furniture, clothing, dishes, draperies, etc. These items you would take with you if you moved. You should also include such items as jewelry, fine arts, silver, antiques, stamps, coins, cameras, musical instrument, golf equipment, etc. These items will need specific scheduled coverage.
How much coverage do you need? Only you know what you own and the cost to replace your possessions. Take an inventory and make sure to update the value as you purchase new or added items.
Improvements & Betterments; Additions & Alterations; Interior Unit Building Coverage
These are permanently part of the building and can include such items as: major appliances, kitchen cabinets, interior partition walls, sheetrock, wall-to-wall carpet, electrical & plumbing fixtures, etc. You must read your master deed and by-laws to understand what your responsibility to insure is. How much coverage do you need? You must determine the cost to replace these items and provide that information to your insurance agent. Our recommendation would be to insure for a minimum of $50,000.
Flood Insurance
If properly insured, the Association should have insurance for the full replacement value of the building. If you believe your unit may be susceptible to the threat of a flood, you would need to purchase contents insurance.
Certificates of Insurance
Occasionally financial institutions that hold mortgages on units of the association, may request proof of insurance from the unit owner and/or the association. The standard document that is requested is usually a certificate of insurance. To request a certificate, simply click here or call (609) 522-3406.
Personal Liability
This provides liability protection for you inside your unit. The Association should provide coverage for the outside and common elements; however this does not protect you. This is an extremely important coverage that is often overlooked. It is even more imperative to have this coverage if your unit is rented. How much coverage do you need? We would suggest no less than $1,000,000 to protect you in today’s litigious society.
Loss Assessment Coverage
If there is damage to common elements, or someone is injured on common property and sues for damages, if the Associations’ insurance coverage is inadequate, each unit owner may be assessed to cover the costs not insured. Loss assessment coverage can help defray the additional cost.
Example: 10 Unit Condominiums
A child falls in the pool and is injured. A court awards a $2.5 million judgment against the Association. The Association insurance policy only has a limit of $1 million. Each owner would be assessed 1/10 of the outstanding award, not covered by insurance, or $150,000 each.
Example: If your Association has a $10,000 windstorm deductible, and suffers damage, each owner could be assessed $1,000.
For more information concerning unit owner coverage, contact our New Business Unit at 609-522-3406 ext. 150 and speak to our personal insurance experts.
Annual Review
At J Byrne, we strongly recommend you review your insurance coverage at least once a year. Your driving habits or living situations may have changed. Or, maybe you’ve made a few major purchases throughout the year that should have extra coverage. Inflation or depreciation can affect the value of your properties and their contents. Call J Byrne now to review, renew or establish your customized insurance policy that fits your world.
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