The special insurance needs of the condo buyer…

Most people understand that apartment dwellers must have a different kind of insurance policy that a homeowner – they basically need a policy that covers their personal possessions and nothing else, since they don’t own anything else.

Condominium owners also have a few special items to consider when purchasing insurance protection. The Insurance Information Institute recommends that condo owners have two policies to protect the condominium lifestyle. The condo owner, remember, “owns” everything inside the physical building, starting, in theory at the inner surface of the walls. So the condo owner needs an individual owner's policy to protect all the contents of a dwelling, as well as structural improvements on the interior of the unit and coverage for fire, theft or other disasters covered in the policy. The Condo Association will have a policy that covers the physical building structure and exterior.

The condominium association should also have a master policy that covers all the common areas the condo dweller shares with fellow owners, such as the roof, sidewalks, common walls and the like. Each condo owner contributes to the cost of that policy, which covers liability for those areas, as well as damage to anything that might need to be replaced, perhaps a common area gazebo or park benches or even the condo sign out front. The association may also have liability coverage for the association board and its officers.

In addition, condo owners should ask about a few extras on the policy that single-family homeowners may not have to be concerned about, such as unit assessment coverage. For example, if there's a fire in the lobby of the condo dwelling, you, as an owner, may be levied an assessment to take care of the damage. Unit assessment coverage would cover such a surprise expense so that you have no money out of your pocket. The condo buyer might also ask his/her insurance agnet whether excess liability coverage might be advised as further protection against any shared liability from the common areas. The agent would have to analysis the association's policy to advise on that.

Other items to consider with your insurance agent would include water backup (into your unit), umbrella liability, flood or earthquake, and a rider to cover expensive items such as jewelry or furs. There are lots of areas of life that the condo lifestyle makes easier by taking those worries out of the picture for owners, but insurance isn’t one of them. Make sure that you understand all of the special needs of the condo dweller, if you are considering a move into a condo complex. For more on insurance needs for condos or any dwelling go to iii.org or you could just email my InsuranceOne partner Eric Chase and tell him that Norm sent you. He's got great condo coverage policies.