Understanding Insurance Deconstructing Your HOA's Coverage

One of the most confusing aspects of owning a condo or co-op is understanding the ins-and-outs of your community's insurance coverage. The fine print of an association's insurance policy is often complicated, but for association boards, management companies, shareholders, and unit owners, it's important that everyone is aware of the coverage that is needed and provided on their properties.

Main Components

Sometimes it may seem like the details of the insurance coverage were written to be deliberately confusing. That's why it's necessary to break down the various parts so you can truly understand the important nuances of the policy. It's up to the board or property manager to take the time to go over the policy with the insurance agent.

"Each policy is written individually depending on the association," said Thomas Heist of Heist Insurance Agency in Ocean City. "A lot of companies have standard packages. Agents that specialize in condominiums have coverage especially geared towards condos."

There are typically two policies involved for protection: the master policy provided by the condo association or co-op board, and a homeowner's individual policy, which is typically written on a standard form HO-6.

Every condo or co-op will have a package insurance, which consists of the property and liability insurance. Property insurance will cover all the property (the buildings, the contents, etc.) and the liability will cover all the liability of the association or the corporation.


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