The Difference Between Condo And Master Condo Insurance

Condo ownership differs from owning a conventional single-family home. For instance, when you own a condo you’re also part owner of restricted common elements. Condo units are part of bigger condo communities, each having restricted common elements such as lawns, building exteriors and framing, walkways, and roads.

Restricted common elements in condominium communities obtain insurance through maser policies. Insuring a condo is distinct because it entails numerous policies and this can be confusing. Fortunately, this guide highlights the difference between an individual and master policy.

Condominium Insurance Policy versus Master Condominium Policy

An individual condominium policy is what you’re responsible for as the owner of a unit. This is necessary since the policy protects your personal items and provides liability protection in case an accident occurs within your unit’s walls.

In numerous instances, your condo association or mortgage lender will expect you to have your own policy. On the other hand, a master condominium policy is a policy held by the condominium association. Its premium originates from your association dues or maintenance fees. This policy covers two major risk areas-general association liability and property coverage for common areas.

Common areas generally include the exterior walls and roof, recreation rooms, stairways, and common hallways.

When You Require Condo Insurance

• There’s damage to your unit’s interior

As a condominium owner, you don’t have building ownership even though you own your unit, frequently including fixtures, for instance, cabinets, lighting, and appliances. Whether insuring the unit’s interior is necessary depends on the type of master policy your HOA has.

In the event that the HOA has an all-in policy, it will typically cover the original items integrated into your place, for instance, lighting, cabinetry, and other fixtures. On the other hand, if the HOA has a bare walls policy, it’s your responsibility to insure everything in your space besides the floor, walls, and ceiling.

• Stolen Belongings

The HOA insurance won’t offer coverage for your belongings, for instance, computer, furniture, and clothing. You’ll have to file a claim through the personal property coverage on your condominium insurance if damage or theft occurs on your possessions.

• A guest sustains injuries in your unit

If a guest trips and falls on the staircase in your unit, individual condominium insurance can help cover the medical costs and your liability expenses in case of a lawsuit.

• You can’t reside in your unit because of the damage your policy covers

If fire damage or another problem covered by your policy makes your place uninhabitable, the insurer will cover expenses associated with residing elsewhere, for instance, hotel room bills.

• The damage surpasses the HOA’s policy limit

If your HOA exceeds the master policy’s limits, for instance repairing considerable hail damage to the building, you’ll need this policy. In this case, every unit owner might have to contribute finances to make up the difference. If your insurance has loss assessment coverage, the sum might have partial or total coverage.

What Master Condominium Insurance Covers

• Damage to the building’s exterior

As a condo owner, you aren’t responsible for repairing the roof after a fire, storm, or another disaster.

• Damage to shared amenities and common areas

Common areas typically fall under the HOA’s jurisdiction, including the land outside the tennis courts, building, and hallways.

• Injuries guests sustain in common areas

If a guest sustains injuries on a slippery walkway outside the building’s front door, the HOA’s insurance will cover the liability expenses in case a lawsuit takes place.

Final Thoughts

Since condominium insurance covers less structure and property compared to homeowners insurance, it’s typically less costly to insure a condominium. To establish the amount of coverage you’ll need, you must conduct research.

Keep in mind that various factors will affect the amount you pay for insurance, for instance, the deductible and the personal property you have.

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