Mastering condo insurance requires review of condo master policy
Florida is condo crazy. They seem to sprout faster than lawn mushrooms. And, condo owners need to know that an equivalent metaphorical fungi can grow in the gaps in condo coverage if they shop for insurance based on price alone. Weed out gaps by getting a copy of the condo association’s master policy.
Look at the Declarations page on the condo’s master policy. It spells out what the association is required to cover and what is the unit owner’s responsibility. Only then will you know what is needed to make a personal insurance policy dovetail perfectly.
When you live in a condo, you really have two insurance policies: the master policy purchased by the condo association or board, and the policy you own individually, known as an HO-6. A condo association gets property insurance for all the structures and for liability protection. The condo liability comes into play if a person gets injured on site or if something owned jointly by the association causes property damage.
Typically, a condo owner’s individual policy covers everything from the bare walls in. This would include wallpaper and wall tile, floor coverings, cabinets, countertops, built-in appliances, and more. Make a list of all this, plus conduct a home inventory of your personal possessions, to come up with a dollar figure to replace or repair all those possessions. Your insurance professional will likely suggest you add 20 percent or so to that to account for rising costs. That’s the first step. Step Two requires getting sufficient loss assessment coverage. This is a gap to close. (Other possible gaps are for sewer backup coverage, flood insurance and additional liability insurance.)
Florida law requires HO-6 policies to provide at least $2,000 loss assessment coverage. That might not be nearly enough if the condo association has a high deductible, and many of them do. The higher the deductible, the more a unit owner has to kick in if a significant claim is made. Knowing the deductible amount and how the condo bylaws direct it to be paid is important. The best way to keep costs from mushrooming is to know where they may pop up.