Condominium living offers a multitude of advantages. From shared amenities like pools and gyms to a sense of community, condos provide an attractive alternative to traditional single-family homes. However, when it comes to insurance, condo ownership presents unique considerations. While individual condo owners typically have personal homeowners insurance, building-wide coverage falls under a separate policy known as condo building insurance or a master policy .

Insurance for condo buildings operates under a unique set of rules and coverage options compared to standard homeowners insurance. While the condo association typically secures a master policy covering common areas and the exterior of the building, individual condo owners need their own policy to safeguard against damages within their specific units and potential liability claims.

Why Do You Need Condo Building Insurance?

While you might have individual condo insurance for your unit's interior and contents, condo building insurance safeguards the structure itself, common areas, and other shared amenities. It's typically managed by the homeowner's association (HOA) and covers more elements than your individual policy.

Here's a breakdown of what condo building insurance typically covers:

• Building Structure: This covers the physical structure of the condo building, including walls, roof, foundation, and common areas like hallways, lobbies, and elevators. In case of a covered peril such as fire, lightning, or windstorm, condo building insurance helps finance repairs or reconstruction.

• Shared Amenities: Swimming pools, fitness centers, community rooms – these amenities are costly to maintain and replace. Condo building insurance covers damage to these shared spaces caused by insured perils.

• Liability Coverage: If a guest gets injured in a common area due to negligence on the building's part (e.g., a leaky stairwell), condo building insurance can help cover legal costs and potential settlements.

• Additional Coverages: Depending on the policy, condo building insurance might offer extra coverage options like boiler and machinery coverage or loss assessment coverage (which helps cover individual unit owner assessments in case of a building-wide claim).

Benefits of Condo Building Insurance

Condo building insurance offers a multitude of benefits for condo owners:

• Peace of Mind: Knowing the building structure and common areas are financially protected in case of unforeseen events provides peace of mind for condo residents.

• Financial Security: If a significant disaster damages the building, condo building insurance helps finance repairs or reconstruction, preventing financial hardship for individual unit owners.

• Maintained Property Value: A well-maintained building with proper insurance coverage can contribute to higher property values for condo units.

• Reduced Liability Risk: Condo building insurance helps cover legal costs associated with liability claims arising from incidents in common areas.

• Stronger HOA: Adequate condo building insurance can strengthen the HOA's financial standing and ability to manage unexpected situations.

Common Questions About Condo Building Insurance (Master Policy)

Condo building insurance, also known as a master policy, protects a condominium complex's shared areas and structure. While you, as a unit owner, are responsible for insuring your own belongings and interior space, the condo association holds the master policy that safeguards the building itself. Here are some frequently asked questions to clarify the coverage and its implications for you:

1. What Does Condo Building Insurance Typically Cover?

Building Structure: Damage caused by fire, theft, vandalism, wind, hail, and other covered perils.

Common Areas: Hallways, lobbies, elevators, pools, fitness centers, and other shared amenities.

Liability Coverage: Protects the association from lawsuits if someone gets injured on the property.

Additional Coverages: Some master policies might offer extra coverage, such as flood or earthquake insurance, depending on the complex's location and needs.

2. What Doesn't Condo Building Insurance Cover?

Individual Unit Interiors: The master policy does not cover your personal belongings and the interior features of your condo unit. You need separate condo insurance (HO-6) for personal property and interior damage.

Personal Liability: If someone gets injured within your unit due to your negligence, the master policy won't cover it. You'll need liability coverage through your personal condo insurance.

Specific Exclusions: Each policy has exclusions, so carefully review the details to understand what isn't covered. Depending on the location, this might include particular perils like sinkholes or floods.

3. Who Pays for Condo Building Insurance?

The cost of condo building insurance is typically rolled into the homeowner association (HOA) fees that every condo owner pays monthly or quarterly.

4. How Much Does Condo Building Insurance Cost?

The cost of the master policy can vary depending on several factors, including:

• Size and age of the building
• Location and vulnerability to natural disasters
• Building amenities and features
• Claims history of the complex

5. Can I See a Copy of the Condo Building Insurance Policy?

Absolutely! By law, the HOA is required to provide you with a copy of the master policy upon request. Familiarize yourself with the coverage details and any specific exclusions.

6. What if the Condo Building Insurance Seems Inadequate?

If you're concerned about the coverage provided by the master policy, you can discuss your concerns with the HOA board. However, individual unit owners typically cannot directly influence the master policy. This reinforces the importance of having your own condo insurance to cover your personal belongings and interior.

7. How Does My Condo Insurance (HO-6) Work with the Building Insurance?

Your condo insurance (HO-6) acts as a supplement to the master policy. It covers your individual unit, your belongings, and your personal liability within the unit. Together, these two policies provide comprehensive coverage for the entire condominium complex and your individual unit.