What is Condominiums & Apartments Associations Insurance?
A condominium association is a legal entity composed of individual unit owners who each own their private living spaces while sharing joint ownership and responsibility for common areas, such as hallways, lobbies, roofs, and amenities. Insurance for condominium and apartment associations is designed to protect the shared structure and operations of these communities. It typically includes coverage for property damage, liability, crime, and workers' compensation related to the association’s activities and property.
Who Needs It
This type of insurance is essential for condominium and homeowners associations (HOAs) that manage shared buildings or community spaces. Any community governed by a board responsible for maintaining common property should carry appropriate insurance coverage to meet legal, lender, and community requirements.
What It Typically Covers
Coverage for condominium and apartment associations usually includes:
- Property Insurance: Covers damage to shared structures and common elements like roofs, elevators, lobbies, and recreational facilities.
- General Liability: Protects the association against claims of bodily injury or property damage occurring in common areas.
- Directors and Officers (D&O) Liability: Covers board members against claims related to decisions made while managing the association.
- Crime and Fidelity Bond: Protects against theft or fraud by employees, board members, or contractors.
- Workers' Compensation: Required if the association employs staff, such as maintenance personnel or security.
Common Exclusions and Limitations
Policies may exclude certain types of damage or liability. Common exclusions include:
- Damage to individual unit interiors or personal belongings—these are typically the unit owner's responsibility.
- Negligence or intentional acts by board members not covered under D&O policies.
- Flood or earthquake damage, which may require separate policies.
Factors That Influence Cost
Several factors can affect the cost of condominium and apartment association insurance:
- Size and age of the property
- Location and regional risk factors (e.g., weather, crime)
- Claims history
- Amount and type of coverage selected
- Number of units and common areas
Proof of Insurance & Compliance
Most states require condominium or apartment associations to carry insurance as part of their governing documents or local laws. Mortgage lenders may also require associations to show proof of coverage. Certificates of insurance are used to verify coverage for lenders, unit owners, or contractors.
How to Get a Quote
To find the right policy for your association, compare coverage options and speak to a licensed agent who understands community association risks. You can start by requesting a customized quote at /quote.
Frequently Asked Questions
What is the difference between condo association insurance and individual condo insurance?
Association insurance covers shared structures and common areas, while individual condo insurance (HO-6) covers the interior of a unit and personal belongings.
Do all condo associations need insurance?
Yes, most associations are required by law or their governing documents to carry property and liability insurance for shared areas and operations.
Does the association's insurance cover damage inside my unit?
Typically, no. Damage inside a unit is usually covered by the unit owner's personal condo policy, unless caused by a covered peril in a common area.
Can board members be held personally liable for association decisions?
Yes, which is why Directors and Officers (D&O) liability insurance is important to protect board members acting in good faith.
Is flood insurance included in a standard condo association policy?
No, flood coverage is usually excluded and must be purchased separately through a private insurer or the National Flood Insurance Program (NFIP).
Still have questions? Talk to a local insurance expert.