What Does a Condo Master Policy Cover?

When you purchase a condominium, it is important to understand the insurance coverage provided by the condo association. One of the key components of this coverage is the condo master policy. Understanding what a condo master policy covers is crucial for protecting your investment and ensuring you have the appropriate insurance coverage. In this article, we will discuss the basics of a condo master policy and answer some frequently asked questions.

A condo master policy is a type of insurance policy that is purchased by the condo association or homeowners association (HOA) to protect the common areas and structures of the condominium complex. This policy typically covers the exterior of the building, including the roof, walls, and common areas such as the lobby, hallways, and swimming pool. It may also cover shared amenities such as fitness centers, parking lots, and elevators.

Here are some key elements that a condo master policy typically covers:

1. Building Property: The condo master policy generally covers the physical structure of the building, including the walls, roof, and common areas. This coverage is important in case of damage caused by fire, storms, or other covered perils.

2. Liability Insurance: The master policy also includes liability coverage, which protects the condo association from legal claims and lawsuits arising from injuries or property damage that occur on the common areas. For example, if a guest slips and falls in the lobby, the master policy would provide coverage for any resulting medical expenses or legal fees.

3. Common Area Contents: The master policy may also cover the contents of the common areas, such as furniture, equipment, and decorations. This coverage is important in case of theft, vandalism, or damage to these items.

4. Loss of Income: If the common areas of the condominium complex are damaged and become temporarily uninhabitable, the master policy may provide coverage for the loss of rental income that the condo association would have otherwise received.

5. Equipment Breakdown: Some master policies also cover equipment breakdown, which includes coverage for repairs or replacement of essential systems such as elevators, HVAC systems, and boilers.

Now, let’s answer some frequently asked questions about condo master policies:

Q1: Do I need my own insurance if my condo association has a master policy?
A1: Yes, you should still obtain individual condo insurance (HO-6 policy) to protect your personal belongings, personal liability, and any improvements or renovations you have made to your unit.

Q2: Will the master policy cover damage to my unit’s interior?
A2: Generally, the master policy does not cover damage to the interior of individual units. This is where your individual condo insurance comes into play.

Q3: Are there any exclusions in a condo master policy?
A3: Yes, there may be exclusions such as earthquakes, floods, or certain types of water damage. It is important to review the policy to understand what is covered and consider purchasing additional coverage if needed.

Q4: Who is responsible for maintaining the master policy?
A4: The condo association or HOA is responsible for maintaining the master policy and paying the premiums. The cost is usually distributed among the unit owners through their association fees.

Q5: Can I make changes to the master policy?
A5: As a unit owner, you typically do not have the authority to make changes to the master policy. However, you can participate in discussions and decisions regarding the policy at association meetings.

Q6: Can I purchase additional coverage for my unit?
A6: Yes, you can supplement the master policy with additional coverage for your unit’s interior, personal belongings, and personal liability through an individual condo insurance policy.

Q7: How can I ensure that the master policy is adequate for our condo complex?
A7: It is important to review the master policy annually and work with a knowledgeable insurance agent or broker who can help you assess your condo association’s coverage needs and make any necessary adjustments.

In conclusion, a condo master policy provides insurance coverage for the common areas and structures of a condominium complex. It is essential for condo owners to understand what the master policy covers and to obtain individual condo insurance to protect their personal belongings and liability. By working with an insurance professional and reviewing the policy regularly, you can ensure that your condo complex has adequate coverage to protect your investment.