Highlights of Unit Owners Insurance
The million dollar question asked by unit owners is: "What insurance do I need for my individual unit?" The answer can be found in the association documents (typically the declarations, Rules and Regulations, CC&R). There is usually a specific section that lists the insurance responsibilities for unit owners. These documents are available from the association, and each association may call them something different.
Unit Owners Insurance Coverage is tailored to fit each individual's needs. The coverage provided under the standard condo unit owner's policy is made up of personal property, property coverage on the unit, loss assessment, additional living expense, personal liability and medical payments. However, there is optional coverage that is available based upon each unit owner's individual exposure.
If the unit owner's dwelling unit is turned upside down, everything that falls out is considered to be personal property. This is always the responsibly of the unit owner to insure. It is not always easy to determine how much to insure, but the cost to replace all belongings, furniture, etc. at today's cost could be substantial.
Property coverage on the unit - most insurance policies use 10% of the limit carried for personal property to determine a limit for this coverage. This coverage provides for interior structure damage such as drywall, carpeting, fixtures, and cabinets. If the declarations or rules and regulations state the unit owner is responsible from the drywall in to rebuild the unit, 10% may not be enough. Knowledge of this responsibility is imperative to properly insure the unit.
Loss Assessment coverage is provided at a specific limit, and may be increased based on need. This coverage applies in the event the association assesses each unit owner for a bodily injury or property damage claim not covered by the master policy, or if there is not enough insurance under the master policy. It can also apply to a deductible that is assessed by the association to the unit owner.
Personal Liability Insurance - provides liability for the unit owner and their family members residing in their house for claims resulting from bodily injury to others or damage to property of others. This coverage is worldwide.
Medical Payments- provides medical expense incurred as a result of bodily injury to others.
Additional Living Expense Coverage - This would reimburse the unit owner for the extra cost of rooms and meals and certain other expenses when the unit becomes uninhabitable due to damage by perils (losses) covered in the policy.
Deductible - the out of pocket cost in the event of a claim. The easiest ways to reduce insurance cost is by increasing the deductible.
Many things must be considered to determine what insurance options fit your needs. Be sure to sit down annually and review your insurance coverage, making sure you have updated for the changes which may have occurred in your life in the past twelve months. | 
