How to Write Coverage for Condominium Associations and Individual Unit Owners
Completing the condominium insurance picture necessitates “jigsaw puzzle” tenacity. Quite a few pieces must be snapped together to assure the proper insurance picture is presented; any missing information can leave a gaping hole in either the association’s or unit owner’s coverage picture. Regardless of the client’s status as the association or individual unit owner, the puzzle cannot be completed until two questions can be fully answered:
Regardless who is being insured, the association or the unit owner, the same mass of information is required to complete the condominium puzzle. Agents and underwriters must have:
- A copy of the association’s declarations or covenants, conditions and restrictions;
- A copy of the applicable state statute;
- An official letter documenting the definition of a unit’s boundaries detailing who is responsible for insuring which property. Many agents and underwriters forego this step, depending on their own experience and knowledge to make this determination. This decision could prove detrimental in court; and
- A verifiable or signed property valuation calculation. Due to the intricacies of ownership and various combinations of responsibility to which condominium associations and unit owners are subject, getting a written valuation from a trained valuation professional or approval from the insured will prove beneficial should any question arise. When insuring personal property only, let the insured value his property.
Insuring individual unit owners requires gathering and piecing together the same detail as does insuring a condominium association. Association and unit owner programs must dovetail seamlessly; unless both sides utilizing the same data, such a clean connection and complete picture is impossible.
This coming Thursday (November 19), the Academy of Insurance is conducting a webinar detailing the intricacies of insuring condominium associations and unit owners. Beyond the information presented in this article, the webinar addresses:
- The three levels of associational responsibility (all in, bare walls, and original specifications);
- The four “real property” definitions unique to condominiums (common elements, limited common elements, unit property and unit improvements and betterments);
- How an NFIP policy affects or is affected by these concepts; and
- The various valuation methods applicable to associations.
Register today for this important webinar.