Homeowners Insurance Primer
Your Co-op/Condo has adequate coverage to protect the building against an unforeseen event or loss (i.e. fire, flood etc…), but the building’s insurance does not cover all the expense or damages that you could face in such a situation.
Even if you did not cause the damage and are not responsible for it, you may still be responsible to pay for some or all of the repair or not be reimbursed for damage to certain items in your apartment. The party responsible for paying for repair or replacement following a loss is spelled out in your Co-op’s Proprietary Lease or Condo’s bylaws. Since the form of these documents vary greatly from building to building and the subtle language can be difficult to understand, you can be left unprotected or unreimbursed following a claim.
To protect yourself you should maintain a Homeowners (aka Owners’ or Co-op Owners’) Insurance coverage. In fact, your Co-op/Condo and mortgage probably require that you maintain such coverage. And with the premiums being relatively low $400-$900 per year, there is no reason not to carry such coverage.
What are the risks if you are not properly insured?
The Cost to restore and rebuild your unit.
The cost to replace your personal property.
The extra expenses incurred by you and your family during the restoration (i.e. cost of living elsewhere).
The aggravation of having the apartment restored to “original” standard rather than the upgraded standard you enjoyed before the loss.
The risk of defending yourself against suits brought by the building, neighbors or their insurance companies for damages you allegedly caused.
The cost of being assessed by the Co-op if the claim exceeds the building coverage.
FACT: The most common causes of claims today are from Fire, Water Damage, Trip & Falls and Owner Negligence!
Remember: In the event of a loss, you should immediately contact your insurance carrier to protect your rights. Don’t get caught up in the confusion or wrangling over who is responsible for restoring your apartment or reimbursing you for damages you incur – remember this is what you pay your insurance premiums for!
How much and what type of coverage should I have?
Policies come with standard types of coverage, most of which can be tailor made to fit your circumstances. You should contact your insurance agent to discuss you policy and coverage to make sure you are adequately covered. It is important that you review your policy annually so you can make any necessary changes. Below are some of the coverages included in such a policy and recommended levels of coverage.
Dwelling/Improvements & Alterations Minimum Suggested Coverage $100,000
Coverage provides for any and all improvements/alterations that the shareholder or any prior owner made to the unit. This may include:
Kitchen & bath upgrades
Furniture built-ins
Floor refinishing, laminate flooring, wall to wall carpeting
Wallpaper, painting, tile work
Bathroom fixtures and kitchen appliances
Personal Property/Contents Minimum Suggested Coverage $100,000
Coverage is provided for your personal property and belongings including:
Furniture and rugs
Electronics – TV’s, Stereos etc
Clothes
Other “usual content” (towels, drapes, silverware, plates and other items normally found in a home)
May not include jewelry furs art and other “high end” items
Additional Living Expenses Suggested Coverage: Actual Loss Sustained
Coverage is provided for the costs incurred to live elsewhere in the event your apartment is uninhabitable due to a covered claim. These expenses could include: hotel, motel, short term rental, meals purchased etc.
Personal/Family Liability Minimum REQUIRED Coverage $100-$300,000 (check your house rules)
Coverage is provided for the claims made by others against you for damage that you or your family allegedly caused. This could include injuries to others or damage to the property of others in the building caused by accidents such as a water overflow, broken faucet, etc. We also recommend purchasing an “umbrella” policy – this would provide extra protection for a minimum premium and would include all forms of liability coverage you maintain (ie. auto liability).
Loss Assessment Minimum Suggested Coverage $25,000
Coverage is provided for an assessment in the event the building does not maintain adequate coverage for either a property (building) or liability loss. The insurance company would pay your portion of the amount you would be assessed in the event there is an uncovered claim that the Co-op has to assess to cover.
For additional information, to check your policy and get expert advice, please contact your insurance agent