What is the difference in coverage between a Condo Unit Owner Policy (HO6) vs. Condo Master Insurance Policy?
Coverage provided by a Condo Master Insurance policy varies by state so make sure that you understand the coverage before purchasing a policy. The cost of a master policy will vary by association. The cost is determined by multiple factors such as: replacement value of the structures, number of units, distance to the coast line, construction type, year built and past claims history.
Anyone who owns a condo or town home should be aware that their personal possessions, personal liability and upgrades to the unit may not be covered under the Condominium Master Insurance Policy and therefore they will need to take out their own Condominium Unit Owners Policy (HO6)
What types of master policies are available for property coverage?
There are two basic master policies when it comes to property coverage:
Bare Walls-In: is a master policy that will cover all real property from the exterior framing inward. However, bare walls-in condo insurance doesn’t cover fixtures and installations within your condo unit. Under your condo community’s bare walls-in condo insurance policy, your condo’s countertops, kitchen and bathroom fixtures and your flooring probably wouldn’t be covered.
All-in Policies: All-in condo insurance master policies provide a greater level of interior coverage for condominium owners. If your condo’s interior is damaged by fire, smoke or water your condo all-in insurance policy would cover many of its interior elements. All-in condo insurance covers fixtures, installations and additions to the interior surfaces of your walls, floors and ceilings.
What types of coverage do Condo master insurance policies offer?
Property Insurance: Property insurance provides protection for a condo association for a loss or damage to the real and personal property of the association. Association can purchase property coverage for the community structure such as the residential buildings, clubhouse, gazebo and pool.
General Liability: General Liability coverage helps protect the insured against legal liability caused by bodily injury, property damage, personal injury to others. This coverage does not provide any liability coverage for the inside of the units, units owners should always purchase a HO6 policy to protect their personal belonging and liability.
Umbrella Liability: Umbrella liability insurance closes the gap between underlying limits of coverage and possible claims in excess of that coverage.
Directors & Officers Liability: Protects members of the association board against claims alleging wrongful or omissions made while carrying out their duties on behalf of the homeowner’s association.
Equipment Breakdown: Equipment breakdown coverage provides coverage for mechanical, electrical or pressure system breakdowns. This coverage can be purchased on a commercial policy or on a high-end homeowners (HO5) policy. If you have a pool, well pumps, generators or boilers, you have a need for this coverage.