Condominium Insurance – Surprise, Surprise

As if condominium living presented enough mysteries,   there’s the ultimate mystery:  condominium insurance.

All condominiums must be insured,  and the policies that condos usually have is known as a “master liability insurance policy”.   These policies, like most insurance policies, have two components:

1.  “First party” coverage:   This provides coverage for damage to the condo structure itself,  including fire,  tornado, earthquake, theft and arson,  among other losses.

2.  “Third party” coverage:  This provides a defense and coverage for legal claims or lawsuits brought against the condominium based upon the condominium’s liability for losses suffered by third parties (e.g. a person slips and falls on stairs in the building where there is no railing on the stairway as required by law, and is injured).

What most condo owners do not know is that most standard condo master policies provide coverage not just for the building itself,  but for the portions of units connected to the building.   This includes,  most importantly,  the walls, ceilings and floors of each unit.

This has a great deal of “real world” benefit.      There are innumerable instances in which a pipe situated between units in a building bursts,  resulting in damage to an abutting unit (usually to the ceiling and walls).     In this instance the unit owner can likely look to the condo master policy for coverage.

There are, however,  exclusions from “first party” coverage that often find their way into master policies.    Many policies now contain exclusions for water or sewage intrusion caused by sources outside the building,  as well as limitations on coverage for mold.

Condo unit owners have an absolute right to a complete copy of the master insurance policy,  so if you encounter a situation in which your unit has sustained damage, be sure to ask a trustee or the property manager for a copy of the policy,  and then contact an attorney.

Greater Boston condo attorney Alan Fanger is a Massachusetts condo litigation lawyer. He serves the entire Greater Boston and Boston metrowest region including Norfolk County, Suffolk County, Middlesex County and the communities of Arlington, Boston, Braintree, Brookline, Cambridge, Canton, Concord, Dedham, Dover, Framingham, Lexington, Milton, Natick, Needham, Newton, Norwood, Quincy, Sherborn, Sudbury, Waltham, Wayland, Wellesley, and Weston, Massachusetts

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