Category Archives: Condo Association Insurance

5 Condo Insurance Mistakes to Avoid

What You Should Know

Congratulations! You own a condominium. You know everything about the condo and surrounding complex (on-site gym, swimming pool?) that made you fall in love with it. Now it’s time to know about condo insurance as well as you know your new home. It’s that all-important layer of protection you’ll need should something unforeseen and unexpected arise. Here are some of the mistakes new condo owners make when buying insurance. Even before you purchase your condo, understand what NOT to do, and you’ll be a well-informed homeowner.

  1. DON’T get a “bare walls-in” master policy. “Bare walls-in” only covers everything inside the condo, but not bath or kitchen fixtures, floors, or architectural details within the condo itself. If you have “all-in” coverage, you won’t have to worry should something shatter your granite countertop in the kitchen. Often those with only “bare walls-in” coverage will have to purchase additional coverage to make sure they don’t have to pay extra if any of these interior things get damaged. However, as with all things relating to insurance policies, it may depend on your budget as to which coverage you can afford. But if you want greater protection, “all-in” is the way to go.
  2. DON’T choose cash value over replacement cost. In your policy, you’ll likely have the option to choose one or the other. If a major appliance breaks, and you’ve chosen cash value, you’ll receive the amount that appliance cost when you originally bought it. That means it could be worth much less if the appliance was purchased several years ago. If, on the other hand, you choose replacement cost, you’ll receive enough money to buy another appliance. Going with cash value may not leave you with enough money to replace what you lost.
  3. DON’T be turned off by high condo association fees. Okay, sometimes the fees are just too high for your budget. Period. However, condo association fees contribute to covering the costs for damages to the communal areas of your condo complex. For instance, if someone sprays graffiti on the outside walls of the building, there will be enough funds to have it painted. If there is damage to the parking lot, sidewalks, any common areas shared by all. As a condo owner, your main concern is what is inside your condo. But since you’ll be part of a community, you’ll want there to be funds to take care of the rest of the property. Your condo association fees should go to those costs.
  4. DON’T sign any policy without reading the fine print. Yes, sometimes there is so much to read in contracts that you may be tempted to go ahead and sign. An insurance broker like the professionals at Zawada can help you to better understand your policy before you sign anything. What’s most important is that you know what you’ll be responsible for and what your insurance covers. For instance, most condo insurance policies cover situations like burglary, but you’ll want to make sure that’s included. Personal property coverage is usually required to cover the cost of personal belongings that have been stolen, such as jewelry and other valuables. You’re your policy so you’ll know if that’s included. Also, liability insurance will protect you if someone is injured inside your condo. It will cover medical costs if someone has fallen on your tile floor or other type of injury.
  5. DON’T ignore the cost of your policy or the deductible. This is the biggest mistake you can make. Is your deductible too high for your budget? And what is considered a reasonable deductible for your particular property type and policy? Answering these questions is made easier when you consult with professionals who can tell you what IS and what ISN’T typical, so you’ll be alerted to any red flags. For example, your condo association’s master policy may have a $5,000 deductible. If there are only ten condo owners, you’d have to pay $500 to cover common property damage. If, however, there are twenty condo owners, each owner would only have to pay $250. Please note—deductibles can go as high as $50,000 in some cases. So know what the costs are before you buy! Also, condo insurance can vary from $100 to $400 a year, so make sure whatever you choose is within your budget.

For all your home, auto and other insurance needs, please contact Zawada Insurance Agency. We work to give you comprehensive coverage at a competitive price.

Zawada Insurance Agency, Inc. is a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.

Master Condo Policies: What They Cover and What They Don’t

Congratulations! You’ve purchased a condominium. Now you need to make sure you have homeowners insurance just as you would if you owned a free-standing house. Usually homeowners insurance will cover loss and liability, as well as your personal items and the people inside the condo.

A master condo policy covers different things. The master policy should be paid for by your condo association fees. There are two types of master policies: “bare walls-in” and “all-in.”

Bare Walls-In

This type of policy will cover the property from the exterior framing inward, but doesn’t cover fixtures and installations within the actual condo unit itself. These include flooring, granite countertops, bath and kitchen fixtures, etc.

All-In

This covers everything including fixtures and interior additions—everything inside the walls of the condo unit.

Here are some other things the master condo policy should cover:

  1. Limited Common Elements

A condo’s master policy should treat you as part-owner of “limited common elements.” These include things on the exterior of the building, from the framing to the sidewalks, lawns, roads and other exterior elements. Through the policy, these areas should be insured against loss and liability.

  1. Ordinance and Law Coverage

This is good to have when repairs, renovations, or major projects like painting become necessary. The condo association will hire contractors to work on the renovations, and this will cover the cost. It will also cover costs due to repairs if the property should become damaged. Ordinance and Law Coverage protects you against weather events, such as hurricanes and tornadoes. Flood insurance may be mandated if you live in a flood zone. Otherwise, it’s an optional, but important, item to consider having in your policy.

  1. Inflation Coverage

This is designed to keep pace with inflation, should something in the exterior of the building need to be repaired. The cost that is covered shouldn’t be what the repair would have cost years ago, so this coverage keeps it up-to-date.

  1. Comprehensive General Liability

If someone trips and falls on the sidewalk of your condominium complex, this protects condo owners from legal liability in case of bodily or personal injury. It also covers property damage.

  1. Backup of Drain and Sewer

This gives you coverage for unforeseen accidents that could affect your personal property.

The master condo policy, or the condo association policy, should also cover those things that you, as the condo owner, may not even think about. A dishonest employee working in the mail room, for instance.

For your own protection, it’s a good idea, as a condo owner, to get personal property coverage. This will protect you from burglary if someone breaks in and steals your personal items inside your individual unit.

Last but not least, before you purchase a condo, make sure you know what the association deductible will be. For example, if an act of nature, such as a hurricane, should damage the building, every condo unit owner is expected to make a payment toward the association deductible. Make sure it’s not too expensive.

For all your home, auto and other insurance needs, please contact Zawada Insurance Agency. We work to give you comprehensive coverage at a competitive price.

Zawada Insurance Agency, Inc. is a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.

Condo Association Insurance: Does Your Policy Include This?

A condo owner is responsible for insuring everything within the walls of his or her condominium. The rest of the building, everything that condo owners share, falls to the condo association to be insured. The purpose of a condo association is to represent the needs of the condo owners, as well as to protect the property as a whole. That is why it is necessary to have condo association insurance. There are many things that can’t always be anticipated, so you want your insurance to protect you in the event of such circumstances, even the ones you don’t think about.

There are basically two kinds of master policies for condo association insurance. Bare Walls-In covers the property from the exterior to the inside, but doesn’t cover kitchen and bathroom fixtures, granite countertops and other things within the condo unit. All-In is a policy that covers all interior fixtures, walls, floors and ceilings.

There are many things a condo association policy should cover, including:

Building Coverage. This relates to the master policy, providing coverage for the building structure and anything attached to it. This could be flooring, fixtures, cabinets, or architectural details, depending on which master policy you have. It also covers common buildings where condo owners may congregate, such as a lobby area, mailroom building or indoor pool building. Anything that is considered part of the property would be included in building coverage. Coverage for drain and sewer backups will pay for accidental damage at your building.

Liability. First, you need liability to protect from claims made against members of the association board. Comprehensive general liability helps protect you from legal issues caused by property damage, personal or bodily injury and other related things.

Protection from Dishonest Employees. This coverage is helpful in case an employee steals money or important documents.

Ordinance and Law Coverage becomes necessary if the condo association needs to hire contractors to work on renovations, painting or other services—this will cover the cost. It will also cover costs incurred for repairs in the event the property is damaged. You will also have protections against weather events, such as hurricanes and tornadoes. Flood insurance may be mandated if you live in a flood zone. Otherwise, it’s an optional, but important, item to consider having in your policy.

Replacement cost will pay for the cost of damaged property, depending on the policy limitations. You’ll want to make sure you have inflation coverage as well. This will increase the amount of insurance on your building and association’s property to keep up with inflation.

There are other coverages that should be included in your policy, including Loss of Income. Up to a year of lost income will be covered if the business can’t operate due to some accident or loss that the policy covers.

For all of your home, auto and other insurance needs, please contact Zawada Insurance Agency. We work to give you comprehensive coverage at a competitive price.

Zawada Insurance Agency, Inc. is a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.