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Condominium Insurance

Hudson Law Firm Feb. 10, 2023

condoMaster Insurance

The Master Condo Insurance Policy in New Jersey protects your association against property risk exposures, including external events that cause physical damage to the building’s structure or the common areas. It covers the building as described in the Master Deed, which includes premises liability for common areas, pools, boat slips, docks, and more.

For example, in the event of a condo fire, the master insurance policy purchased by the condo association or homeowners association (HOA) typically covers damage to the building's common areas. Additionally, individual condo owners may have condo insurance, which provides coverage for the unit itself, including walls and fixtures, as well as personal property, personal liability, and loss of use. The type of master insurance policy your HOA or condo association has will directly impact the amount of condo insurance needed to purchase.

A condo building master insurance policy should be enough to cover the building and common areas of your complex as well as any liabilities that the HOA may incur. The amount of coverage you need depends on the size, age, and location of your complex. To decide the amount of coverage, you should start by looking into your condo association's master insurance policy, which will provide the basic coverage. From there, you will need to consider the value of the improvements attached to the surfaces and decide on a coverage limit that meets your needs. Additionally, you will need to choose a deductible amount. Deductibles typically available on a master condo policy range from $500 to $10,000. The higher your deductible is, the lower the premium will be.

Unit Insurance

Homeowners insurance for a condo works similarly to other types of property insurance. This policy, however, covers the interior of your condo unit, the personal property within it, and the liability of the owner in the event of a loss. The coverage includes limited dwelling coverage for alterations, appliances, fixtures, and improvements, as well as any structures that are solely the responsibility of the owner, as defined by their HOA bylaws. Personal property coverage will protect the items that fill your home, such as furniture, electronics, and other belongings. Loss of use coverage provides extra living expenses if the owner is required to leave their home after a covered loss. Additionally, liability coverage will cover damages relating to the common use areas of the development, not the owner's home. For further protection, a specific type of insurance, known as HO-6 insurance, is available for condo owners. It offers additional coverage for loss assessment charges from the HOA, subject to the policy terms.

Loss assessment coverage can help cover expenses related to a total loss of a condominium building. In the event of damages to common areas, the HOA may pass on part of the bill to unit owners. If you have loss assessment coverage, it can help defray that cost. Loss assessment coverage may apply to property damage, liability, injury on the premises, or deductibles. This type of policy provides protection to condo owners when the building or common areas have been involved in a claim, and covers the remaining out-of-pocket expenses — due to qualifying perils — that weren’t covered under the condo’s HOA policy.

Umbrella Insurance

Another solution, umbrella insurance provides extra liability protection beyond the limits of your existing home, auto, and other insurance policies. It's designed to protect you from major claims and lawsuits, providing coverage for liability claims such as personal injury, property damage, and legal fees.

Umbrella insurance typically covers claims that are not included in other policies, such as libel, slander, malicious prosecution, false arrest, and invasion of privacy. It also covers claims for which you may be liable, such as those caused by pets or recreational activities.

Umbrella insurance can protect your assets from being seized in a lawsuit and can pay for legal expenses so you don't have to. The policy typically covers the cost of defending yourself against a lawsuit, as well as any judgments or settlements that result from it.

Umbrella insurance policies generally have limits of $1 million to $5 million, with some policies offering even higher limits. It's important to remember that umbrella insurance only provides coverage for liability claims and does not cover any damages to your own property.