Condominiums are one of those complicated risks that aggravate insurance professionals, from agents to adjusters. The interplay of a condominium association declaration or agreement and the master policy of that association, and how that interplays with the unit owners insurance is often confusing, and sorting out which policy pays for damages is essential.
First, it's necessary to determine who is responsible for what property. The association declaration is the governing document between the association and the unit owner. This document provides a legal description of the property, defines what constitutes a unit, a common element, and a limited common element, and the ownership interests in each.
These elements are also described in the state statutes; see the chart here: Condominium Statutes by State. The statutes will define each of these aspects and detail who has the responsibility for providing insurance coverage.
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Common Elements
Common elements are those elements in which the unit owners all have a shared ownership interest. The community pool and clubhouse, roadways and sideways, roofs and siding of the buildings, gazebos, ponds and other property are all common elements. The association fees go towards the expenses for the upkeep of these elements and repairs. The association maintains these funds, spends them as needed, and purchases the necessary insurance.
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For enterprise-wide or corporate access, please contact our Sales Department at 1-800-543-0874 or email [email protected]Christine G. Barlow, CPCU
Christine G. Barlow, CPCU, is Executive Editor of FC&S Expert Coverage Interpretation, a division of National Underwriter Company and ALM. Christine has over thirty years’ experience in the insurance industry, beginning as a claims adjuster then working as an underwriter and underwriting supervisor handling personal lines. Christine regularly presents and moderates webinars on a variety of topics and is an experienced presenter.