You are on your own when it comes to insuring your condo
Q: My husband and I have purchased several single-family homes and we have always obtained insurance before the closing. We are about to purchase our first condo and my sister-in-law says that we do not need any insurance because the entire association is covered under the master policy. Is she correct?
A: A condominium has three components. The first is your unit. How this is measured and what it includes is clearly stated in your condominium documents and on the plat and plans.
The second component is the Limited Common Elements. These are reserved for use by one or more, but less than all, of the unit owners. These are also defined in your condominium documents. Examples include storage areas and parking spaces.
General common elements are those portions of the property that may be used by all the unit owners. Roofs, foundations, perimeter walls, corridors, laundry rooms, common stairs, the lobby, trash areas, and utility rooms are considered general common elements.
Your condominium association does have a master policy. The amount of coverage should be equal to or above the minimum insurance coverage which is required. This policy covers problems of the common elements and the limited common elements. For example, if a tree falls on the pool house, the master policy will pay the damage claims, less the deductible. It does not include your unit.
In short, you are on your own when it comes to insuring your unit. You should carefully review the terms and conditions of your master policy and discuss the details of your unit and personal belongings with an insurance agent. We hear terrible accounts of water damage that is so pervasive that all of the unit’s walls and floors must be replaced to eliminate mold. This can be a very expensive repair and insurance coverage would certainly help minimize the repercussions of the disaster.
If you are unclear about how your insurance company is treating you, contact the Florida Department of Financial Services Offices of Insurance Regulation. This agency was established “to ensure that insurance companies licensed to do business in Florida are financially viable, operating within the laws and regulations governing the insurance industry; and offering insurance policy products at fair and adequate rates which do not unfairly discriminate against the buying public.” Of course, if you have a serious problem, seek the advice of an attorney.
Attorney Sylvia Heldreth is a Certified Specialist in Real Estate Law. Her office is located at 1215 Miramar Street in Cape Coral.
This article is not intended as specific legal advice to anyone and is based upon facts that change from time to time. Individuals should seek legal counsel before acting upon any matter involving the law.