February Guest Blog Spot

Condo Assocation Contract Determines Insurance Responsibility

by: Ryan Hanley

Owning a condo comes with a lot of perks.  You don’t have to mow your lawn.  You don’t have to paint the exterior.  You don’t have to shovel your driveway.  Many of the annoyances that come with owning a home are handled by the condo association.  Unfortunately, there can also arise the misguided belief that included in the perks of owning a condo, is the idea that responsibility for insurance the physical condo structure falls solely to the condo association. 

After purchasing a condo it is important to understand that there are physical portions of the structure that you are responsible for purchasing coverage on.  You must look into your condo association by-laws to verify exactly what portion of the condo you are responsible for insuring.  The language within the by-laws will most often read one of two ways:

  • Responsibility from studs in, or
  • Responsibility for betterments and improvements.

Studs In

Though the exact wording will vary, the most common agreement for insuring a condo places the responsibility of insurance on the unit owner for building coverage from the frame, or studs, of the building into the condo unit.  This property includes interior walls, fixtures, cabinetry, flooring, molding, doors and all other physical features included within the condo unit.  The dollar amount of coverage is held in Coverage A – Dwelling Coverage on your condo policy.  Placing a dollar value on this coverage can be tricky.  One suggestion is to talk with the condo association president or the property manager and find out what it cost to build each unit. 

If obtaining the cost to build each unit is not possible then you must estimate based on local building and labor costs.  Contact a trusted building contractor in the area to get a feel for cost-per-square-foot to build in your particular geographic area. 

When it comes to determining the dollar amount of coverage it will also help to lean on the experience of your independent insurance agent. 

Betterments and Improvements

Another very common agreement for insuring a condo leaves the unit owner only responsible for purchasing coverage to repair any betterments or improvements to the condo from its original purchase condition. 

In this type of arrangement the unit owner would insure upgrades such as replacing linoleum with marble tile or changing out a ceiling light for a crystal chandelier.  The dollar amount of Coverage A – Dwelling Coverage on your condo policy would increase as you add “upgraded” features to the condo unit.

It is important to contact your independent insurance agent immediately upon beginning work so the dollar amount of the project can be added to your policy in the event of a loss.

The Contract Matters

What I hope you take away from this article is that the condo association by-laws are very important.  The language in that document determines who will be responsible for what in the event of a loss.  If you find the wording to be confusing or convoluted contact a lawyer.  Whatever you do make sure that your responsibilities as the condo unit owner are clearly defined and verify with your independent insurance professional that you have the correct corresponding policy.


Ryan Hanley is a New York State-licensed property-casualty, life and health insurance agent for The Murray Group, proudly serving all of the Albany / Capital Region and New York Tech Valley.

Ryan was born and raised in Albany, N.Y. In 2003, he received his bachelor's degree from the University of Rochester in Mathematics. Ryan began his insurance career at The Murray Group (formerly Guilderland Agency) in May 2008, and serves the agency alongside his father-in-Law, brother-in-law and wife, Lauren, whom he married in June 2009.

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