What type of insurance do I need for a co-op or condo?

If you have purchased a condo or co-op, the bank will require insurance to protect its investment in your home. You may, however, need more insurance to cover your personal items, liability or fees that may be charged to you regarding shared areas of the building like the lobby.

You will need two separate policies to protect your investment:

Your own insurance policy.
This provides coverage for your personal possessions, structural improvements to your condominium and additional living expenses if you are the victim of fire, theft or other disaster listed in your policy. Your poicy also includes liability protection.

A "master policy" provided by the condo/co-op board.
This covers the common areas you share with others in your building like the roof, basement, elevator, boiler and walkways for both liability and physical damage.

To adequately insure your condominium, it is important to know what structural parts of your home are covered by the condo/co-op association and what are not. You can do this by reading your association’s bylaws (CC&Rs) and/or proprietary lease. If you have questions, talk to your condo association board members, management company, contact us, or your family attorney.

Sometimes the association is responsible for insuring the individual condo or co-op units, as they were originally built, including standard fixtures. The individual owner, in this case, is only responsible for alterations to the original structure of the condo unit, like remodeling the kitchen or bathtub. Sometimes this includes not only improvements you make, but those made by previous owners.

In other situations, the condo/co-op association is responsible only for insuring the bare walls, floor and ceiling. The owner must insure kitchen cabinets, built-in appliances, plumbing, wiring, bathroom fixtures etc.

Also ask us about the following additional coverages:

Loss Assessments.
This reimburses you for your share of an assessment charged to all unit owners as a result of a covered loss. For instance, if there is a fire in the lobby, all the unit owners are charged the cost of repairing the loss.

Water back-up.
This insures your property for damage by the back-up of sewers or drains. Water back-up may not always be included in a policy. Check to see that it is included.

Umbrella liability.
This is an inexpensive way to get more liability protection and broader coverage than is included in a standard condo/co-op policy.

Flood or earthquake.
If you live in an area prone to these disasters, you will need to purchase separate flood and earthquake policies. Flood insurance is available through FEMA's National Flood Insurance Program ( http://www.fema.gov/nfip/ ). Both flood and earthquake insurance can be purchased through your insurance agent.

Floater or endorsement.
If you own expensive jewelry, furs or collectibles, you might consider purchasing additional coverage since there is generally a $1,000 to $2,000 limit for theft of jewelry on a standard policy.

Also don’t forget to ask about all available discounts. You can reduce your rates by raising your deductibles and by installing a monitored smoke and fire alarm system. You will also qualify for a discount if your buidling has interior fire sprinklers or 24 hour manned security.  If you insure your automobiles with our agency, you may quailfy for multi line discounts. 

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