The primary difference between a homeowners insurance policy and a condo owner’s or townhome insurance policy is the amount of coverage necessary to adequately insure that part of the building you are responsible for.
The following documents, statutes and other insurance, will likely have an effect in determining necessary coverage:
- Covenants, conditions and restrictions (CC&Rs) of the condo owners association.
- Declarations & Bylaws of the association.
- The property and casualty insurance policy for the association, including the amount of the policy deductible or self-insured retention.
- Title 57 Real Estate, Chapter 8 Condominium Act, Section 43 Insurance. (57-8-43)
- Title 57 Real Estate, Chapter 8a Community Association Act, Section 4 Insurance. (57-8a-4)
- Section 401 Definitions.
- Section 402 Applicability of part.
- Section 403 Property and liability insurance required — Notice if insurance not reasonably available.
- Section 404 Other and additional insurance — Limit on effect of lot owner act or omission — Insurer’s subrogation waiver — Inconsistent provisions.
- Section 405 Property Insurance.
- Section 406 Liability Insurance.
- Section 407 Damage to a portion of project — Insurance proceeds.
To avoid potential coverage gaps between your insurance policy and the association insurance policy, it is your responsibility to understand your policy, and how it correlates with the items listed above.
Certain covered losses insured under the association’s property and casualty insurance policy might be less than the policy deductible. The association policy would not pay on a claim where the loss occurs in this situation.
Typically the insurer for the condo owner association has reviewed the CC&Rs, declarations and bylaws, and other information to provide for the coverage needs of the association.
We suggest you review your coverage needs with your insurance agent.
When obtaining a new policy, it is always advisable to request a copy of the completed, signed application. Representations made in the application may impact your coverage.