First-time condo owners in New Jersey often wonder why they need a personal policy to protect their unit when their condo association has a master policy. The master policy and your personal policy cover different aspects of your home. Creative Risk Management LLC can help you understand how these policies work together to protect your unit fully.
What a Condo Master Policy Covers
Your condo association, or HOA, owns the master policy and pays its premiums. The master policy covers risks that can occur to your building’s exterior and common areas. Common areas include hallways, lobbies, the building roof, and the pool area, if applicable. These policies typically offer two types of coverage levels: bare walls and all-in. Bare walls coverage protects the building structure but excludes interior finishes. All-in coverage includes everything in bare walls coverage, plus upgrades and improvements made to individual units. Technically, you pay for this coverage through your condo association fees.
Personal Condo Coverage
Also known as HO-6 insurance, this policy is similar to insurance for single-family homes. It complements the master policy by providing dwelling coverage for interior walls, cabinetry, countertops, and fixtures that you are responsible for maintaining. If your condo association has an all-in policy, you may not need this coverage. Other provisions include personal property coverage for furniture, clothing, and electronics, as well as liability coverage. Your personal policy may also include a loss of use provision and a loss assessment provision. Loss assessment helps pay for your share of a master policy loss that exceeds the policy’s maximum coverage. You own the policy and pay the premiums directly.
Your individual insurance policy should work in harmony with the master policy. Learn how you can purchase an HO-6 policy to protect your condo fully. Contact the experts at Creative Risk Management LLC, serving New Jersey residents, to learn more.
