The Components of a Condominium Insurance Policy

In terms of Condominium Insurance Policy, the Association requires that there is insurance on the Condominium that you live in. However, knowing what is being provided, and if you might want to get a little extra insurance is something you should know when living in a condominium. Some buildings only carry what their management deems as necessary and leave out non essential coverages that may not apply to the building or the area, and some managements may go all out to protect their buildings as well as themselves. A typical Condominium Insurance Policy will cover the basics such as the property, general liability, umbrella, equipment breakdown, directors and officers liability, flood, environmental liability and fidelity coverage.

Property coverage provides protection in case of common disasters like fires, earthquakes, floods and terrorism, as well as for the replacement and/or repair of the property in event that there is physical damage. Somewhere in the documents, there should be a Reporting Clause somewhere, so that if you do a certain amount of improvements to the building you have to report it to the association. General Liability covers any lawsuits that may be brought on by any damage to a person(if they fall and break something on the property, etc) or damage to the premises. As a form of extra liability coverage, Umbrella coverage is there in case you need the additional coverage because the primary coverage is not large enough to cover the claim. Special aspects of the policy should cover the more common breakdowns that can happen.

Equipment breakdown is there to cover large pieces of equipment like boilers, chillers, elevators, etc. It covers anything that isn’t covered in the property policy, lighting damage, for example. Some extra coverages are environmental liability, which protects the property owners in case of damage from things like mold, seepage and fumes from environmental factors, and anything airborne that would need to be taken care of by a contractor. Fidelity insurance is in the event of forgery, fraud or theft by an employee.

All of these coverages protect the Association, but there is one policy that covers the individual, and that is Directors and Officers liability. This is so that directors and officers are protected in their duties and acts done as the officials of the Association. In the event that they are sued because of something that they did on behalf of the Association, they are protected by this policy. There is also a costly and often unnecessary Underground Boiler Policy, although this is relatively uncommon these days.

So, before moving into a Condo, it would be a wise idea, for future reference and in the event that you may someday have to make a claim, to find out what all the Association covers and if you may need, or want to get extra coverage.