It is important to personally buy homeowner’s condo insurance along with the condo master association’s insurance purchased by the association. You may be thinking “I already have insurance, why do I need more?”
Homeowner’s insurance (also known as a HO-6) provides valuable coverage that the master insurance does NOT. We will keep it as simple as possible and briefly go over 4 coverages provided by a homeowner’s insurance policy.
#1 Personal Liability Coverage
When you purchase homeowner’s insurance there is personal liability coverage automatically provided. This coverage provides protection if a law suit is brought against you for property damage or bodily injury harm you cause. An example of bodily injury would be a guest slipping and falling.
Your master insurance provides liability insurance to protect the association. In today's world, when an accident happens, everyone that can be sued, will be sued. This happens whether the defendant is right or wrong. An example: a person slips and falls. They will probably sue the unit owner or tenant, the condo association, and anyone else connected to it.
#2 Personal Contents
If your personal contents are damaged by a covered loss (wind, fire, theft, and more) this coverage will allow you to get paid so you can replace your contents (minus the deductible). The condo association's master insurance doesn't provide protection for your belongings.
#3 Loss of Use Coverage
Let’s start with an example: Your building catches fire and there is damage to your unit. Now your condo is inhabitable because of the fire, smoke or water damage. You need to find another place to live while the building is being repaired. Loss of use coverage will pay for those additional living expenses that you incur above and beyond your normal living expenses.
#4 Building Coverage
An example: You have a $5,000 deductible on your condo's master insurance. Your association's logic is sound by wanting a higher deductible to avoid petty claims being put against your master policy. This helps to keep your master insurance affordable! On the other hand, you do not want to have to pay $5,000 out of pocket if your unit is damaged. The solution, you can buy building coverage ("Coverage A") on your homeowner's insurance policy (inexpensively) to fill that $5000 gap. By doing this you are essentially lowering your master insurance deductible back down to your homeowner’s insurance policy deductible (typically $500). It's simple, it’s inexpensive, it's brilliant!
AJ Marchionne was raised in Pembroke, MA and now lives in South Boston, MA. In 2007, he graduated cum laude with his bachelor's degree from Bryant University in Financial Services.
AJ began is insurance career as the third generation at Albert J. Marchionne Insurance Agency Inc. in November of 2009. He serves the agency alongside his father, Al Marchionne and uncle, Rob Marchionne, and 9 other employees. Condominium Master Policies is one of his areas of specialization. He is licensed in Massachusetts for property and casualty insurance, life and health insurance, and investments.