What is Master Condo Insurance?
The primary objective of most condo associations is to nurture and protect the community they oversee. Making an informed decision about their master condo insurance policy is an essential element of fulfilling this role.
If an unexpected event, such as fire or vandalism, causes damage to either the following common areas or shared systems, the condo association, as the representative of all unit owners, has both a duty and a vested interest in repairing the resulting issues as quickly and cost-effectively as possible.
- Physical structure housing the condos and the lot they sit on
- Roofs
- Windows
- Elevators
- Utility lines that service these areas
- Sidewalks
- Hallways and lobbies
- HVAC systems
- Plumbing systems*
- Electrical systems*
- Landscaping
- Swimming pools
- Clubhouses
- Courtyards
- Fitness centers
- Parking spaces or lots
* Except for the electrical outlets and plumbing systems located within the interior of a condominium.
Your condo association needs to be confident that the master condo insurance coverage it has selected will help finance any necessary refurbishments in these and other common areas after a loss and that the claims process will go smoothly.
In addition, it is vital for your master condo insurance policy to provide your association with liability protection. If someone gets injured in a common area, the association could get sued for medical costs and other related expenses. However, the liability coverage in your condo association master policy typically helps pay for the expenses the association is found liable for, as well as the association’s legal defense costs.
With our hands-on approach, attention to detail, and a focus on accuracy, Austin Insurance will assist your condo association in making sure it has invested in the right level of protection for your specific condo property and that it will meet your expectations and needs if you ever have to file a claim.
Selecting the right condo association master insurance policy for your property
As your insurance professional, Austin Insurance wants to help you fully understand all the master condo insurance options available for your specific property before you make any purchase decisions. The following is an overview of the three main types of master condo insurance policies that you may want to consider and what they include.
#1 Bare Walls Coverage. This protection covers only the basic building elements, like walls, floors, roof, and elevators, as well as fixtures, common areas, and collectively owned furniture and other items not considered the property of an individual condo owner. Some condo associations choose this coverage because they feel it is the best way to try to reduce the number of potential claims that could go against the master condo insurance policy and may help keep premiums down. However, this coverage option leaves a lot for each condo unit owner to be responsible for insuring, including the interior walls of their home, along with the flooring, cabinetry, plumbing and electrical fixtures, and more. The association should make sure that all condo owners are aware these items need to be added to their personal condo insurance policy.
#2 Single Entity Coverage. This type of policy includes everything that bare walls coverage does, but the association takes on more responsibility for the interior of each condo unit, as well. Single entity protection typically extends to items inside each individual condo, such as basic flooring, cabinetry, and plumbing and electrical fixtures. However, if a condo owner changes or upgrades the original, standard finishes—e.g., converting carpeting to hardwoods, redoing the kitchen countertops and cabinetry, replacing light fixtures, retiling the bathroom, etc.—they need to understand they are responsible for letting their insurance professional know about these enhancements so the appropriate replacement cost coverage can be added to their unit owner’s policy.
#3 All-Inclusive Coverage. If you take this approach, the condo association master policy will not only include everything in bare walls and single entity coverage but also any structural improvements, betterments, or additions that are made in individual units by condo owners. With all-in coverage, a unit that is damaged by a covered loss would typically be restored to the condition it was in before the event occurred. The only thing the unit owner would be responsible for through their individual condo policy is coverage for their personal property.
The association rules and covenants generally specify what type of coverage is required, so your insurance professional clearly should review these documents and make sure that you have the necessary protection in place.
Austin takes it one step further, though. As we collaborate with you, we may uncover reasons your association may want to reconsider your current insurance coverage requirements, and we can guide you in more detail through the pros and cons of the different master condo policy options available.
How Austin takes care of your condo association is different from all the rest
There are several steps the Austin team will typically take before we make any insurance recommendations to your condo association. For example, we’d like to tour your property so we can explore every facet of it, including the common areas, grounds, structural components of the buildings, and more. We will also request a copy of your association’s bylaws so we can review them for any insurance requirements that are outlined in this document. Plus, we are happy to meet with your condo association board to provide guidance on how to minimize the potential for a loss and how to handle a loss if it happens, as well as to speak with your condo unit owners to help them understand their personal insurance responsibilities.
If your association chooses to work with Austin, we will perform annual reviews of your insurance needs, making sure any changes to your association’s operations, bylaws, or property have been reflected in your master condo insurance coverage. Most importantly, if you do ever need to file a claim, we have a dedicated claims manager at Austin who is familiar with the unique claims process for condo associations and will take an extremely hands-on approach to get you through the process as quickly as possible.