When working with a client buying a condominium, there are “sticky” points in the education process of insurance in the purchase. The hardest one is the first one as far as coverages go: building items.
When you buy a condominium you will start off with two policies. One is called the “Master Policy”. Every owner is covered and the policy is paid for through your HOA dues. This policy is purchased by the homeowners association for the structure of the building (the foundation, the exterior, the outbuildings) and the common areas (the walkways, the plumbing and electrical of the common areas, the pool/hot tub owned by the association).
The second policy is purchased by the individual condominium owner to cover their unit. The point where the individual unit insurance coverage starts is usually spelled out in the HOA by-laws or covenants. The terms used might be “walls in” (the owners individual policy coverage starts at the wall board), or paint in, etc. I’ve even seen “air to air”. What is important to know is that within the condo, at some point, the unit owner will be responsible to insure the building items in that condo. Carpet, counter tops, paint, cabinetry, shower, crown molding, light fixtures, etc. These items, if they exist in the condo, might be economy quality, or custom and hand built. It falls on the condo owner to know what they are responsible for, the quality of the construction and the cost to replace all of it. Other condo owners or the president of the HOA might be a resource.
The amount of building items coverage is not an amount the insurance agent comes up with. Insurance companies give agents resources to come up with replacement cost on homes (roofs, electrical, foundation, etc). Not individual condo unit building items. For more detailed information, check out this great link we found and let me know if you have any other questions.
www.foxbusiness.com/personal-finance/2013/07/22/condo-insurance-every-unit-owner-needs/