In a building with many different condo owners, it’s the master insurance policy that protects what are known as the “limited common elements” — the exterior, roof, common areas, and other parts of the building that no specific owner has exclusive control over.
This policy is managed by the homeowners association and it’s covered with the monthly assessments all owners pay.
Condo insurance master policies come in two varieties, “bare walls-in” and “all-in.” Bare walls-in condo insurance master policies cover all real property from the exterior framing inward but not anything inside the actual condos. All-in policies, on the other hand, cover elements of your condo as well, so if you leave the tub on and have water damage, for example, you’re still covered. Some all-in policies even cover improvements made to the units over time, so if you’ve renovated your condo with luxury finishes, these would be covered.
Of course, the all-in policy is more expensive, so the type of policy selected really depends on the management style of the HOA. Some groups of owners like to have more flexibility by having a basic bare walls-in policy and then getting to select their own separate insurance policy for the interior of their condo. Other buildings like to go with a more comprehensive option, particularly when certain circumstances make it more cost effective to get an “all-in” policy.
To fully understand where the building’s coverage ends and your own HO-6 coverage begins, be sure to look up how your building defines your unit. This should be in your HOA’s declarations or bylaws. For example, your unit may start at the studs or the unfinished drywall, in which case you are responsible for damage to wall coverings like paint and wallpaper.
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