A condominium unit owner usually has an individual insurance policy that covers personal belongings, parts of the building the condominium agreement makes the owner responsible for, additional living expenses after a loss, and legal liability for injuries or damages to others.
The condominium association maintains a separate policy for the building and shared property, which can lead owners to ask whether that coverage replaces the need for individual insurance. The short answer is: sometimes the policies overlap and sometimes they do not.
Insurance companies design owner and association policies to complement each other in some cases and to overlap in others, so it is important to know what each policy covers and which will apply first.
The association's policy typically covers the building structure and fixtures that are part of individual units if the condominium agreement requires the association to insure them. For more details on association-level coverage and common provisions, see Condominiums & Apartments Associations Insurance.
The association's policy also covers property owned by all unit owners collectively, such as lobby furniture, shared exercise equipment, and moving carts available to residents.
The association's policy does not cover an individual owner's personal property. Unit owners must buy their own policies to insure furniture, electronics, clothing and other personal belongings, and to provide legal defense and payment for any judgments arising from their own liability.
Some items may be covered under both policies. For example, appliances required by the condominium contract may be covered first by the association's policy and then by the unit owner's policy for any remaining loss. For information on insurance for apartment and condominium complexes, including multi-unit considerations, see Apartment and Condominium Complexes Insurance.
Association policies typically include a waiver preventing the insurer from seeking recovery from unit owners after the insurer pays a covered loss caused by a resident. The insurer may still seek recovery from non-owners who caused the damage.
Although the association's policy can be comprehensive, it is not a substitute for an individual unit owner's insurance. To review coverages and gaps, consider scheduling time to talk to an agent about the specific risks in your unit and common areas.
Frequently Asked Questions
Does the association's insurance pay for my personal belongings?
No. Personal belongings such as furniture, electronics and clothing are covered only by your individual policy, not by the association's policy.
Who pays first if an item is covered by both policies?
The association's policy generally pays first for items it is required to insure; the unit owner's policy may cover any remaining loss according to its terms.
Can the association's insurer recover costs from me after a fire I caused?
Most condominium association policies include a waiver of recovery against unit owners, so the insurer typically will not seek reimbursement from the owner for a covered loss.