In condominium complexes, there are common areas that condo associations are typically responsible for. If anything happens to a condo complex’s area, the complex’s association is usually expected to pay for any necessary repairs. Additionally, if anyone is hurt in a common area, the association might be held liable. Condo association insurance policies help protect Massachusetts condo associations from covered risks like these.
Condo association insurance policies are specialized insurance policies that insurers design specifically for condo associations. These policies are primarily used to insure condominium complexes’ common areas, such as:
(The exact areas that a policy insures can vary. They’ll be determined by the policy’s terms, conditions, and exclusions.)
In general, condominium association insurance policies offer a combination of liability and property coverages that benefit Massachusetts condo associations. Liability coverages normally protect condo associations from claims and suits that accuse them of being responsible for injuries or property damage that people sustain. Property coverages typically protect common areas against fire, theft, vandalism, wind damage, and similar perils.
(Just as the exact areas that a policy insures can vary, the perils a policy provides protection for can also vary.)
Condominium association insurance is designed to protect condo associations, and it’s usually purchased by condo associations. Therefore, condo associations normally pay the premiums associated with this insurance.
Many condo associations in Massachusetts, however, pass the costs of condominium association insurance onto individual condo associations. Premiums are frequently added onto annual assessments, dividing a policy’s annual premiums equally by the number of units in a complex. Deductibles for claims are sometimes passed on as special assessments, dividing a claim’s deductible by the number of units in a complex so that each owner pays their share of the deductible.
In addition to providing coverage for common areas, some condominium association policies also offer some protection for individual condo units. Policies can be grouped into three categories based on how much coverage they include for individual units.
Bare walls-in condominium association policies offer only the most basic level of protection. They usually cover the walls of a unit, but that’s often about all they cover. Some don’t even include coverage for plumbing systems or electrical wiring.
Single entity condominium association policies essentially provide coverage for standard units. In addition to covering unit’s walls (and plumbing and electrical), these policies also typically include coverage for standard features. For example, cabinets, countertops, flooring, and ceiling fans that are included in every unit would likely be protected by a single entity policy.
Modified single entity condominium association policies offer the most robust coverage. Along with the coverages provided by single entity policies, these policies normally also cover features that individual owners have had upgraded. For instance, modified single entity policy would likely cover upgraded granite countertops or newly installed hardwood flooring.
Shopping for condo association insurance is a lot like finding any other type of insurance. It generally involves assessing an association’s risk exposure, determining what coverages are appropriate, requesting quotes from insurers for policies that include these coverages, and choosing one of the quotes provided. Massachusetts-licensed independent insurance agents can help condo associations in the state with every step of the process, just as they help others find other kinds of insurance.