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One of the most important aspects of a condo association is the level of condominium
insurance coverage that was selected by the association. A condo association insurance
policy or "Master Policy" as it is usually called, will usually include coverage
for initially installed property in accordance with the original plans and specifications
of the building or buildings. Usually the building and all materials that make up
the condo building are covered under this master policy.
Condo association insurance policies are usually written under an "all risk"
coverage basis or a "broad form" basis. The all risk coverage will usually
afford coverage of all perils. Some exclusions can apply such as earthquake, nuclear
reaction or acts of war. The broad form coverage usually include losses resulting
from fire, lightning, hail, wind, vandalism, sprinkler leakage, smoke and building
collapse.
Types of Coverage
At the time of a claim, the amount payable to the insured association is usually
based on the type of coverage selected. There are three types of coverage:
- Actual Cash Value (ACV)
- Pays the insured association for the value at the time of the loss. This usually
includes depreciation and usage deductions.
- Replacement Cost
- Pays the insured association for the cost of replacement usually with a stated
amount limit (for example: up to 125% of original value).
- Guaranteed Replacement Cost - Pays the insured association usually with no
maximum limit. Deductibles usually apply to a covered loss.
Condo association insurance also includes liability coverage for the covered premises.
This liability coverage protects the association from a law suit brought against
them as a result of an accident or injury that may occur on or in the condo property.
Directors and Officer's Coverage
The condo association's directors and officers are also exposed to law suits for
their activities of managing and caring for the association's business. Directors
and Officer's coverage, usually know as D&O Coverage should be included
on all master condo policies. This type of coverage protects the personal finances
and assets of the directors and officers in the event of a law suit against them.
Sometimes the association also acts as an employer for work such as maintaining
grounds, performing minor repairs, snow removal, etc. Employment Practices Liability
insurance should be then be obtained. This type of coverage will protect the association
for a suit that could be brought against them as a result of the repairs or maintenance
they performed. Employment practices liability insurance can usually be included
under the D&O policy.
Free Condo Association Insurance Quotes
Coverage for a condo association should be reviewed at least once per year by the
board members, their management company and a licensed insurance professional who
specializes in this type of insurance. If you manage a condo and would like to get
more information on how to properly protect the condo association with the right
coverage, please submit your free, no-obligation
condo association insurance quote request. Get expert advice and the best
rates for your condo association.
Available to condo associations and property managers in Connecticut, New Jersey,
New York & Pennsylvania
Click here for a free Condo Association Insurance Quote
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