Co-op Insurance

To protect your belongings and yourself, you need to purchase a personal home insurance policy. If you think insurance for your co-op is covered by your monthly fees, think again. Typically, your monthly fees are used to fund a building insurance policy. If your unit is robbed or damaged, your building insurance will not provide any coverage for your personal possessions, nor will it offer you any protection from personal liability.

To protect your belongings and yourself, you need to purchase a personal home insurance policy, which is designed for condos and co-op apartments. Insurance regulators say it's crucial to have personal home insurance, if you live in a co-op or apartment.

Insuring The Building
Co-op owners should first review their association's master insurance policy to find out what that policy covers, and what it doesn't. In most cases, that building insurance policy should cover common areas such as the hallways, roof, basement, elevator, boiler, and common walkways, for both liability and physical damage. Co-ops associations can also obtain coverage for sewer backups, seepage, floods, earthquakes, employee dishonesty, and changes in municipal rules and regulations. For older buildings, another option is liability coverage for claims resulting from exposure to lead-based paint.

In some cases, the building association's insurance policy also covers the standard fixtures in each unit. The co-op owner might only be responsible for personal property inside the unit and for any additions or alterations made to the original structure, such as new carpeting. In other situations, the building policy covers only the bare walls, leaving co-op owners responsible for insuring anything inside a unit such as cabinets, carpeting, and bathroom fixtures.

Insuring The Co-op And Your Belongings
Under the general terms of co-op owner coverage, your policy should cover your personal property from the following perils:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Aircraft
• Vehicles
• Smoke
• Vandalism or malicious mischief
• Theft
• Damage by glass or safety glazing material that is part of a building
• Volcanic eruption
• Falling objects
• Weight of ice, snow, or sleet
• Three categories of water-related damage from home utilities or appliances
• Electrical-surge damage

A basic co-op policy should also provide liability protection for incidents such as someone tripping and falling while in your unit. In addition, if a covered peril should make your co-op uninhabitable, your policy should include a provision to cover the additional living expenses you incur when you have to temporarily live somewhere else.

Cash or replacement value: You can insure your personal possessions for either the cash value or their replacement cost. With cash value coverage, you receive the value of the item minus depreciation, while replacement value pays the current cost to replace the item.

Deductible amount: What level of deductible can you afford? A higher deductible can mean lower insurance premiums, but if something happens, be prepared to pay out that high amount.

Unit or loss assessment: If your co-op building is damaged by an insured disaster or its members are sued, and the cost of that damage is not fully covered by the association's policy, this type of coverage would pay for your share of an assessment charged to all unit owners.

Flood or earthquake: Most standard homeowners policies do not include coverage for either floods or earthquakes. If you live in an area where either might occur, consider adding coverage. Many homeowners, co-op owners and apartment dwellers opt out of such protection.

Floaters: Most policies set limits for items like jewelry, collectibles, and computers. If you own expensive items, you can pay extra premiums to have those items fully insured under what is called a floater. Without a floater, a policy will cover such items only under general categories and offer reimbursement up to a maximum of only a few thousand dollars (limits vary).

For more information about our Co-op Insurance policies and/or an application please contact CM&F Group at 1-800-397-3008, ext: 241 or via email on the "Contact Us" section of this site.