Understanding a Condo Master Insurance Policy

Perhaps you are moving to a new place to enter university or start a new job or looking for a permanent residence to settle in. Among the many living options that people have, condos tend to be a popular first choice for many due to the advantages that come with living in one. For people living on their own for the first time, condos are usually seen to be ideal since they are not as high-maintenance as having your place, but you still get the perks of living in your unit. 

Whether you decide to become a homeowner, condo unit owner, apartment unit owner, or tenant, you will always have to think about insurance. However, the way insurance policies work may differ based on your living space. When it comes to living in condos, you are sharing a space with other unit owners or tenants. As such, it is not as clear or easy to determine liability from damage or other insurance claims if it occurs in a shared area. With that, condo insurance policies work slightly differently from other homeowner’s insurance policies.   

You may wish to know about the nitty-gritties about condo master insurance policy if you decide to move into a condo unit. Though it has similarities to your usual home-related insurance policies, there are also slight nuances that cater to the unique living arrangements in condos.

The condo insurance policy is also known as the HO-6 policy. The policy covers the condo’s common areas, as well as the structure and walls of the property, and provides liability or living expenses coverage if unit owners cannot live in the condo for some time. The way it works is for the homeowner’s association (HOA) or condo board to hold the master policy, effectively making all the condo unit owners a policyholder. Owners will then pay regular condo fees, which go towards paying the premiums. 

Essentially, the condo master insurance policy covers the structure, common areas, and walls of the condo. However, it is a common misconception that having this policy alone is already sufficient. Even with the master policy in place, your personal belongings and liability are still vulnerable to risk, so getting a personal condo insurance policy will be essential to cover these gaps. With this, you can be more assured and protected in case of any peril. 

Condo master insurance policies usually come in three types: bare walls-in, walls-in, and all-in policies. The bare walls-in policy covers the “bare structure of the condo,” which includes the common areas. It covers any area used by all condo unit owners or tenants but has limited coverage since it does not include the installations or improvements in your unit. If your HOA carries this type of master policy, you will need to get a personal insurance policy with a greater level of protection to ensure your belongings and property are safe.

On the other hand, the walls-in policy offers everything included in the bare walls-in policy, but with the addition of built-in fixtures in individual units. It has a more encompassing coverage but is still limited since it does not include alterations or improvements that you make in your unit at your expense. 

Finally, the all-in policy is the most comprehensive condo master insurance policy available since it covers everything the condo association owns, and the condo property structures. Essentially, it has all the inclusions of the other two policies but also covers what the other two do not. It includes everything, from the basic structure of the condo to the built-in fixtures, all the way to alterations and additions that you make in your unit. 

Since there are varying levels of coverage in condo master policies, ask about this before moving into a unit. Knowing this may help you decide whether a condo is right for you, or may help you determine the type of insurance policy you should get for yourself. Additionally, know that some associations may not carry a master policy, which makes unit owners responsible for insuring the condo. As a result, make sure you review all the pertinent documents before signing anything, so you understand what you are getting into and know what coverage you need to purchase. 

Living in a condo offers a unique lifestyle because of the concept of common areas. Since you are sharing specific spaces with other residents or unit owners, insurance policies work differently. As such, familiarizing yourself with how a master insurance policy works will be a big help before you decide to move into your own unit.