Why do I need to have insurance for my condo when there's a master insurance policy on the building?

Asked by Lenore and Alex Wilkas, Vista, CA Mon Jul 23, 2007

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Steven Ornel…, Agent, Fremont, CA
Fri Oct 1, 2010
Hi Lenore, in general, you really only have the jurisdiction to decide to purchase insurance for your personal items within a condo. Typically, the Lender requires an HO6 policy, which is designed for the owners of condos and includes coverage for the part of the building owned by the insured and for the property housed within. You may also be asked to obtain insurance that covers such specific things as the cabinets, sinks, toilets, etc.)

One of the toughest things you will face is finding out where the "line of demarcation" is for your condo. Meaning, from what specific point in the construction of the condo does liability end for the HOA's Master Policy and where your insurance starts. For example, I have had instances where exterior walls are under the HOA, but interior walls are the condo owner. In other cases, it has started at the interior face of the drywall. You should know where this "line in the sand" is.

Best, Steve
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Ellen Chung, , San Mateo, CA
Sat Aug 4, 2007
As mentioned, most everything besides the actual walls on the inside of your condo will not be covered with the master policy; so you will have to pay out of your own pocket to replace such things as cabinets, toilets, bathtubs, and other fixtures. It also covers a myriad of other things like Patti mentioned--medical liabilities, damaged fixtures and material, etc.

Also if you're thinking along the lines of condo insurance, also consider getting earthquake insurance. If your complex is on the large side, they will most likely already have a master earthquake policy as well to build the complex back up in the case of an earthquake. But again it will not cover anything besides the very basic, which are essentially the walls of the unit. You will still be required to pay for the replacement of cabinets, fixtures, etc., and in earthquake cases your condo insurance will not cover the expenses to replace or rebuild anything. You will be required to have earthquake insurance in order to cover that damage. Just as a forewarning, earthquake insurance is pretty expensive and doesn't cover a whole, whole lot when it comes to rebuilding.
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Patti Philli…, , Carlsbad, CA
Mon Jul 23, 2007
As the two previous professionals stated, the condo's master policy covers whatever happens to the outside structure only. You need to have the inside of your structure covered. What if yu have a leak? You'll need to replace your flooring- you may even need to replace a neighbor's flooring, if the problem is found to have come from your unit! What if someone falls inside your unit and needs medical attention? You need to know that is covered. Don't go without coverage- it is very insignificant when you aren't covering the structure. One caution: you may look at exactly what the master plan covers. A recent client of mine just found out that the outside of her unit wasn't covered for earthquake. She paid about $150.00 for the year to cover her $750,000 unit! If you have any questions, or would like a realtor who will help you answer your questions, please give me a call! 61-507-2100
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Victoria Lor…, , Fairfield County, CT
Mon Jul 23, 2007
The master insurance covers the basic structure, your insurance covers from the sheetrock in and includes the contents of your home. Should there be a fire or leak from a neighbor, you would need this.
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Robin Haynes, , Saint Louis, MO
Mon Jul 23, 2007
In most cases, that master policy does not cover your contents or even and damage inside of your unit. You will a copy of the master policy for your insurance agent to review and suggest the appropriate level of coverage. Some of my clients have chosen just to use the Master Policy, but it is not something I reccommend.
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