What is it?
Who needs it?
What is a condo master policy?
Condominium complexes in California are normally responsible for their common areas, and their responsibilities can extend to both damage/destruction and liability risks. Purchasing a condo master policy may help complexes protect against these risks.
Condo master policies condominium associations specialized insurance for their common areas. The coverages in these policies are unique from what most property and liability policies offer.
What California condominium complexes should have condo association insurance?
The vast majority of condominium complexes in California should have condominium association insurance. Association bylaws and lenders’ financing usually require coverage.
Additionally, letting insurance lapse can result in devastating consequences for a condominium complex’s residents. The condo association could be faced with a major loss or liability lawsuit, and the costs of either may be passed onto residents if no insurance protection is in place.
What areas of condominium complexes can condo association insurance cover?
Condo association insurance may extend to almost any common area on a condominium complex’s property. Depending on its terms and conditions, a policy might cover:
- Exterior Features: Landscaping, fences, light fixtures, walkways, courtyards
- Interior Features: Entryways, hallways, stairwells, elevators, lounges
- Amenities: Pools, exercise rooms, business centers, community rooms
- Maintenance Areas: Utility sheds, landscaping sheds, basements
- Common Walls: Exterior walls, shared walls
Condo complexes should work closely with an insurance agent who knows these policies well, in order to make sure all of a complex’s common areas are properly covered.
Are there different kinds of condo association insurance policies?
Condo association insurance policies can be classified according to how much protection they provide for in-unit features. There are three general levels of in-unit protection that a policy might offer:
- Bare Walls-In: Usually covers just the most basic features, such as walls, electrical and plumbing.
- Single Entity: Usually adds coverage for the standard features units originally came with, such as cabinets, counters and flooring.
- Modified Single Entity: Usually adds coverage for upgraded features units could’ve originally had, such as granite countertops, premium flooring and fireplaces.
Since modified single-entity affords so much protection, it’s sometimes also called “all-in.”
Policies that offer more coverage for in-unit features shift some insuring responsibility from individual residents to the condominium complex. Of course, the premiums for condo master policies increase if a complex transfers the responsibility. Residents frequently can get slightly less coverage and lower rates for their individual policies, however.
How much coverage a condominium complex provides for residents’ in-unit features is up to the condo association board and unit owners. Complexes should communicate their condo master policy choice to residents so that residents can adjust their own condo insurance policies accordingly.
How much do condo master policies cost?
The premiums charged for condo master policies can vary significantly, for many different factors impact cost. A condominium complex’s size, number of buildings, age of buildings, amenities and policy type are merely some of the details that insurance companies look at.
One of the easiest ways to accurately determine how much a condominium complex will have to pay for its chosen coverages is to compare policies with an independent insurance agent.
An experienced independent insurance agent can help complexes review their coverage needs, and then can show complexes suitable policy options from multiple insurance companies. Since independent agents aren’t connected to any particular insurance carrier, they can recommend the best policies regardless of what company is underwriting them.
How can condominium complexes in California get a condo master policy?
For help insuring a condominium complex, contact the independent insurance agents at Heffernan Walton Insurance. Our team of California insurance agents is well-versed in the various condominium insurance policies that insurers offer, including condo association policies. We’ll work closely with your board and members to find a condo master policy that provides the protections your complex needs.