What Coverages Do Condominium Association Insurance Policies Offer?
Condominium association insurance policies usually provide both property coverage and liability coverage for the spaces they insure. Property coverage protects these spaces from covered perils, which may include fire, vandalism, break-ins, and similar threats. Liability coverage may help protect a condominium association if it’s found responsible for property damage or an injury. In most cases, liability coverage will pay legal fees and settlements associated with covered claims and lawsuits (up to a policy’s limits).
In addition to protecting common areas, some condo association policies also offer protection for features within units that aren’t actually shared by condo owners. Policies can be separated into three categories based on how much property protection they provide for items within units:
- Bare walls-in policies normally only cover units’ walls, sometimes not even covering units’ plumbing and electrical systems
- Single entity policies typically provide coverage for units’ standard features (as well as the coverages provided by bare walls-in policies)
- Modified single entity policies frequently offer coverage for features that condo owners have upgraded (in addition to the coverages included in single entity policies)
Because whether a condo association has a bare walls-in, single entity or modified single entity policy affects how much coverage condo owners need to purchase, condo associations should let all of their condo owners know what type of master policy the association carries.
Who Pays for Condominium Association Insurance?
Since condominium association insurance is purchased by condo associations, it’s usually paid for by associations. Most associations in Massachusetts, however, pass on the costs of their policy to condo owners. Associations frequently evenly divide their master policy’s premiums by the number of condo owners in their complex, and then they add that amount to each condo owner’s annual assessment.