" What in my unit is covered by the building insurance? "
If you live in a condo, there are always the inevitable insurance questions.
What insurance do I need to carry ?
What insurance is provided on the condominium master policy?
If I make improvements to my unit, does my personal unit-owners policy cover the
improvements or does the the condominium master policy, which covers the
building?
Basically. there are two approaches to condominium insurance.
Some insurance companies make their master policy refer to the insurance section
in the condominium documents.
The master policy will say that the master policy provides coverage on the
buildings based on the condominium ownership agreement. This means the insurance
adjuster is to refer to the by-laws in the event of a claim and interpret what
the by-laws intend to cover (found in the insurance section of the condominium
documents). Some by-laws only require the master policy to insure the bare
walls. Other by-laws require the master policy to insure all the improvements.
In other words, a unit owner may spend thousands of dollar improving a unit and
would also need to purchase additional insurance on these improvements while a
unit owner in a different condominium may never purchase additional insurance
for these improvements. The master policy would automatically include it.
The other approach to master policy insurance is to have the policy override the
condominium by-laws.
The insurance company defines the extent of the building coverage. Within the
policy you will find a definition of what the insurer includes under building
coverage. Always remember that insurance companies can never settle building
claims and pay less than what the by-laws require.
Just remember, the information we provide you with today is for your particular
insurance company on the date you call our office. Next year you may be with a
new insurance company that takes a different approach to master policy
insurance. To avoid a problem, you may want your homeowner unit policy to extend
beyond what you need today. If in the future your association changes their
insurance, you may find your unit underinsured.
See our list of
insurance companies and the method they employ.
What should you buy to cover your unit?