Condo Media - April 2010 - (Page 20)

HOMEOWNER’S CORNER by Stephen M. Marcus HO-6 Why Condominium Owners Need Their Own Insurance Policies the unit owner. The master insurance policy would respond only to claims in the common area. If the unit owner didn’t have insurance, the unit owner would have to pay to defend the suit and pay any settlement or judgment. If the unit owner has no funds to pay the judgment, the owner could lose his or her home to pay for the judgment. These costs would have been avoided if the unit owner had an insurance policy. unit, not all policies do. Some policies pay only for the original fixtures that were there when the developer sold the unit, not for subsequent improvements. While Fannie Mae, Freddie Mac and FHA now require lenders to make sure a unit owner/borrower has an HO-6 policy, there is no guaranty that the local lender will request that required coverage. In addition, loss of personal property within the unit is not covered under the master insurance policy; paintings, jewelry and other items may be insured only by a rider to the individual unit owner’s HO-6 policy. t is estimated that only 40 to 50 percent of all U.S. condo owners carry their own HO-6 condominium homeowner insurance policies. They may believe the condominium’s master insurance policy will cover all losses, but this is a misconception. The master insurance policy may, subject to the deductible, provide for some coverage for certain damage to fixtures, cabinets, etc., within a unit, but there are still many uninsured risks. I Liability Suppose a guest falls in a unit and is seriously injured. The guest might sue Property Damage Although many condominium master insurance policies cover certain fixtures, floor coverings and cabinets within the Deductibles As deductibles on master policies increase, associations have started assessing the deductible to unit owners. An assessment of a $10,000 deductible could be financially severe for a unit owner. On the other hand, if a unit owner has an HO-6 policy with coverage A in appropriate amounts, that policy would typically pay the $10,000 subject to the much smaller deductible under the individual homeowner’s policy. NILES COMPANY, INC. THE AMO® Full Service Property Management for over 100 years Avoid Gaps in Coverage Master insurance policies have different coverage. When obtaining insurance, unit owners must make sure their policy dovetails with the master insurance policy. Owners should consider having the agent who wrote the master insurance policy write their individual policies. That agent, being familiar with the master insurance policy, should be able to ensure that the individual policies have no gaps in coverage. CM Stephen M. Marcus, Esq. is a partner in the law firm of Marcus, Errico, Emmer & Brooks P.C. located in Braintree, Mass. YOUR PROPERTY IS OUR FIRST PRIORITY 877-877-4537 Jerry Ragosa, 20 CONDO MEDIA • APRIL 2010

Table of Contents for the Digital Edition of Condo Media - April 2010

Condo Media - April 2010
Table of Contents
From the CED’s Desk
President’s Message
CAI News
CAI Regional News
Asked & Answered
Homeowner’s Corner
Risk Management
Rising Fears
Vendor Spotlight
Industry Perspective
CAI National Law Conference Was Tops … Now for the Bottom Line
.2010 CAI-NE Insurance & Restoration Directory
Advertisers Index
Classified Service Directory

Condo Media - April 2010