Condo association insurance, also known as a master policy or HOA condo insurance, protects your unit and those living within the building. Avoiding gaps in condo association insurance policies is essential to avoid liability issues or medical costs associated with any accidents that occur on the property. Muller Insurance offers condo association insurance from carriers in many states, such as New York, Pennsylvania, and Connecticut. Here, we discuss this coverage and how to avoid gaps.
What Is Condo Association Insurance?
Condo association insurance is a policy held by a condo homeowner’s association or condo association. Having the right insurance coverage is crucial for condo associations as it protects them from financial and legal liability, maintains property value, and ensures compliance with legal requirements. Condo association insurance typically covers:
- Common areas such as lobbies
- Elevators
- Parking lots and garages
- Exterior walls
- Shared amenities, like swimming pools, gyms, and tennis courts
However, condominium association insurance does not cover the inside of individual condo units, which tenants are responsible for insuring. Condo owners pay the association’s insurance through their monthly fees or assessments. When a covered loss occurs, the association files a claim with its insurance company.
Common Gaps in Condo Association Insurance Policies
When evaluating a condo association’s insurance, it’s crucial to understand that even with a robust master policy, there may be gaps in coverage, leaving owners vulnerable. Some common gaps to be aware of include:
- Interior unit damage: Master policies typically cover the building’s exterior and shared spaces, but not the interior of individual units. This means that damage to walls, flooring, cabinets, and fixtures inside tenants’ condos is not covered.
- Personal property: Items like furniture, electronics, clothing, and valuables are not protected under the association’s policy. Unit owners need personal condo insurance to cover these belongings.
- Loss of use: If a unit becomes uninhabitable because of a covered event, the master policy likely won’t pay for temporary housing or living expenses. Individual coverage is needed for this protection.
- Liability inside the unit: Injuries that occur inside a condo, such as a guest slipping and falling, are not covered by the association’s liability insurance. Personal liability coverage is essential.
- Assessment coverage: If the association’s insurance is insufficient to cover a major loss, unit owners may be required to contribute through a special assessment. Some HO-6 policies offer loss assessment coverage to help with these unexpected costs.
- Water damage from plumbing or sewer backups: Damage caused by plumbing failures or sewer backups inside condos is typically not covered by the master policy. Add-on coverage may be needed to protect against these risks.
- Natural disasters: Events like earthquakes, floods, or hurricanes may not be covered under standard master policies. Individual policies or add-ons are often required for full protection.
It’s important to be aware of these gaps so you can fill them with additional coverage. Without adequate coverage, associations could face special assessments, legal battles, and even damaged reputations.
How to Avoid Coverage Gaps
Understanding what your condo association’s master policy covers – and what it doesn’t – is key to protecting your investment. Here are steps you can take to identify and avoid potential coverage gaps:
- Review the master policy: Start by requesting a copy of your condo association’s master insurance policy. Look for details on what areas are covered and what isn’t to determine if you need additional policies.
- Understand the policy type: Bare walls coverage covers the structure and common areas, whereas all-in policies cover some interior elements, like fixtures or built-ins. You should know which you have, so you won’t be surprised when a claim needs to be filed.
- Compare with tenants’ HO-6 policy: Be sure that your condo tenants have HO-6 coverage to fill gaps regarding interior damage, property, liability, and loss of use.
- Ask about special assessments: Find out if your association has a history of issuing special assessments. If so, consider adding loss assessment coverage to your policy to protect against unexpected costs.
Another way to avoid gaps in your insurance coverage is to work with a reputable insurance agency. At Muller Insurance, we are licensed in more than 20 states and offer tailored solutions for condo associations. Our deep understanding of the unique risks faced by multi-unit properties ensures that associations receive comprehensive protection. We have been in business for more than 118 years, building a reputation for excellence and reliability and representing more than 20 leading insurance companies, including:
- The Andover Companies Insurance
- Cumberland Mutal Insurance
- Fitchburg Mutal
- Amtrust Financial
- Farmers of Salem Insurance
- Franklin Mutual Insurance
These partnerships allow Muller Insurance to offer flexible, competitive plans that meet the specific needs of condo associations. Let us help you find the right coverage for your condo association. We can even find bundling opportunities to help you save money. Request a quote or contact us today to learn more about condo association insurance and how we can help you prevent coverage gaps.
