Do I really need my own condominium unit owner's policy in addition to my master policy?

Posted in Personal Insurance

You have finally moved into a condominium -- no more shoveling snow, no more raking leaves.  You are under the impression that your monthly condo fee covers your "insurance," great, you think, another bill you do not have to pay.

The reality is, your monthly condo fee does not cover your personal property, personal liability or loss of use if you experience an unforseen property claim. 

As a condominium unit owner, you are also in a situation where a neighbor’s property loss could have a direct impact on your property.   Here’s a quick example -- your  upstairs neighbor has a fire.  The fire department puts out the fire, which results in water coming  through your ceiling, damaging your home and your personal contents.

The water damage is so extensive that you not cannot live in your home until repairs have been conducted.  Where do you go – a hotel?  Who pays for it?  What if the repairs take several months?   And the worst part is – you have all of these additional expenses because your neighbor had a fire.

While the master condominium policy will cover  the building damage, it does not cover your damaged personal property or the cost for you to live in a hotel.  If you have a mortgage, you will still be responsible for your monthly payment, and your hotel bill until you can return home. 

The remedy for this nightmare scenario is to purchase a unit owners policy (referred to as an HO6) before a catastrophic event occurs.  This policy will cover your personal property, personal liability and loss of use;  It will pay the additional expense you incur to live in that hotel until you can move back into your home. It will also pay to replace the personal property (your stuff) that was damaged or destroyed (up to your coverage limit), again, because your neighbor had a fire.

Don't let the unfortunate incidents of others cause you financial hardship.  Make sure that you have the coverage you need today, just in case. 

This article was written by Betty Ann Devaney, Personal Lines Manager of our Watertown, MA office.  Betty Ann can be contacted at (617) 923-9607.