Association Insurance Notes

Romar House Insurance

** The following is for informational value only. Actual coverages and restrictions vary and for definitive interpretation, you should consult your local professionals**

The Romar House Condominium Association currently provides property coverage which protects all of the condominium association’s common real property as spelled out in the association’s by-laws and documents. Our package of coverages also provides Commercial liability coverage, workers compensation, flood insurance and all other coverages deemed pertinent by the board to protect the association’s common exposures

These documents dictate that the individual unit owner is responsible basically for all real property (building) items that are located within the perimeter walls of the unit. This would include such items as floor coverings, interior walls, cabinets, plumbing and kitchen fixtures, etc. Attached to this letter as an addendum, is a copy of a legal opinion requested in 2009 which more specifically spells out the unit-owners responsibility and which also references the relative responsibilities of both the unit-owner and the association in regards to the common issue of water damage. Because of this, it is suggested that each unit owner procure their own insurance to protect for damage to these items.

The industry standard coverage form which provides the requisite coverages is called a Homeowners 6 – Unit-Owners Form (a HO-6, for short). Under this coverage form, Coverage A – Dwelling is the coverage that would be used to protect your interior building items referenced above. You should therefore determine what it would cost to replace all of those items and pick your limit of insurance accordingly. Coverage C – Personal Property is the next coverage item and is used to insure the value of your contents located inside the condo. Taking an inventory of your personal property would be prudent to arrive at this limit. Another major coverage provided by the HO-6 is Coverage E – Personal Liability. As you probably know, liability insurance protects you in case you are sued and deemed liable for injuries or damages caused by you, your family or guests.

Furthermore, if your unit is ever rented, the appropriate endorsement should be added to this policy to pick up the additional exposure this entails.

The Association also provides the maximum limits of flood insurance allowable by the National Flood Insurance Program (NFIP). This flood insurance, unlike the basic property insurance mentioned above, covers loss to all real property, both common and otherwise, up to the maximum of $250,000 per unit. Because this limit is the most that will ever be paid for damage by the NFIP to any one unit, including any additional exposure resulting from an assessment to owners that might arise from a flood loss, there doesn’t seem to be any reason for an individual unit-owner to purchase flood insurance covering the dwelling (the unit-owner’s unit). Having said this, it would be prudent to speak with your local insurance agent for confirmation.

Individual unit-owners however, should consider purchasing flood insurance to protect for flood damage to their personal property, especially those unit-owners located on the first few floors.

If, as is the case with many of our unit-owners, your condo serves you and your family as a second home, it would be prudent to check with your local agent who is insuring your primary home. Industry standard Homeowner policies providing coverage on your primary home have some built-in free extensions of coverage that could prove beneficial to you. Most Homeowner policies provide coverage for your personal property (contents), even while in a secondary residence. This secondary residence contents coverage is typically limited to 10% of your limit of your primary contents and is subject to a few other coverage restrictions. It is however built-in and usually available as well.