The following insurance information is provided for your utilization. It briefly explains your coverage through the Association, and your personal needs. It also details claims procedures, and policy deductibles, depending upon the incident.

Condominium Ownership

In a condominium form of ownership, you own the interior of your home. You also have an undivided interest in the exterior of all buildings and common elements, along with the other owners in the Association. Almost everything outside the perimeter walls of your home is a common element. There are a few exceptions, which would include items that service only your home. This includes electrical and water lines, air conditioning units, patios, decks, windows, doors, garage doors, etc. (if applicable). These items are considered part of your home, even though they may be located beyond your perimeter walls.
Condominium owners share equally in the ownership of all common elements. Therefore, even though you may have a shrub in front of your home, it does not belong to only you, but is owned in common by everyone. Even the siding on a building is owned by everyone collectively, and not just the residents in that particular building. Please check your Association Documents for a more detailed description of the common elements. The Association (the owners collectively) maintains an insurance policy which includes blanket building coverage, including each home. The homes are insured as a “builder standard” type. This would include the home as originally constructed by developer, exclusive of all upgrades, betterments, or improvements. Therefore, each building and each owner’s home is directly insured under the master insurance policy.

Master Policy Coverage

The Association’s insurance policy is the primary policy. Each owner’s individual H06 policy is secondary. The Association’s insurance policy includes blanket building coverage, which provides for the replacement of the condominium building, including the home (as described above), if an accident occurs. The policy also provides for common area liability coverage, and directors and officers liability insurance. Like all insurance policies, the Association’s policy includes a deductible. Each year, when the insurance policy is renewed or placed with a new company, the policy deductible is determined by your Board of Directors. The deductible, per claim is $10,000. If there is damage to the interior of a home, the homeowner is responsible for their share of the master policy’s deductible.

Personal Coverage

For their personal protection, condominium owners should maintain separate insurance coverage, commonly referred to as an H06 policy. This policy, which is specifically designed for condominium owners, should provide insurance protection for the value of your personal belongings, and developer upgrades/betterments installed in your home when it was built. You should also maintain insurance for any other upgrades or improvements that were made to your condominium home, as well as personal liability coverage. It is recommended that, in addition to insuring the replacement cost of all your personal property, you also include building coverage for the interior of your home, for an amount of $5,000, or an amount equal to the Association’s policy deductible.

The building coverage contained in your H06 policy would provide additional protection for you, in the event your condominium home was damaged and the full cost was not reimbursed by the Association’s policy, because of the deductible. An owner should also investigate “loss assessment” insurance. This would cover you, personally, for any special “insurance liability assessment” made by the Association due to an insurance liability loss. If a loss occurs, your property may be subject to updated building codes due to changes in laws and ordinances. This type of coverage should be investigated with your personal agent. You should also ensure that your H06 policy includes coverage for water damage and wind driven rain. Loss assessment insurance, building coverage, law and ordinance insurance and water damage coverage are fairly inexpensive. The Association recommends that you contact an insurance agent concerning your personal insurance needs.

Building Exterior Damage

If an incident occurs that damages the exterior of the building(s), or the common elements, the Association would file a claim with the master policy, and any amount settled would be less the policy deductible.

Building Exterior Damage and Home Damage

If damage occurs that affects both the exterior of the building and the building interior of an individual home, a single (combined) claim should be filed for both areas. The responsibility of the deductible would be pro-rated between the Association and the owner of the home, based on the percentage of the covered damage. In addition to filing a claim against the Association’s policy, a home owner should also file a claim against their H06 insurance policy.

Home Damage – Caused by Common Element

If a condominium home were damaged by an accidental direct physical loss to a common element, such as a roof leak, then a claim should be filed against both the master policy and the owner’s individual H06 policy to determine if it is a covered loss. Policies vary as to coverage for building deficiencies and water damage. Any insurance proceeds paid from the Association’s policy would be less the policy deductible.

Home Damage – Caused by Owner

If damage occurs inside of a home, which was not caused by another resident, by the failure of a common element, or in conjunction with the damage to a common element, then the home owner would be directly responsible for the master policy deductible. To provide for the maximum reimbursement, a home owner should file a claim against both the Association’s policy, and their H06 policy. If it appears that the cost to repair the damage would be less than the deductible of the master policy, then an owner should file a claim exclusively against their personal policy. The owner of the home would be responsible for their HO6 policy deductible.

Home Damage – Caused by Another Resident

If a condominium home is damaged by the actions of another home owner or resident, such as when a home sustains water damage caused by a neighbor, the owner of the damaged home should file a claim against their neighbor’s HO6 policy. In this instance, the cost to repair the damaged home should be reimbursed in full. The owner of the damaged home could also file a claim against both the Association’s policy, and their own HO6 policy. Any amount received from the Association’s master policy would be less the deductible.

Water Damage

If your home sustains any water damage, it is imperative cleanup occur immediately, and that you file an insurance claim as quickly as possible. If water is not cleaned up, more damage may occur. What begins as a relatively minor water damage claim may become a costly loss and may subsequently result in higher insurance rates. Furthermore, untreated water damage and/or standing water can result in mold and/or fungus growth. Please be advised most insurance policies no longer provide coverage for bodily injury or property damage as a result of mold.