Understanding the Difference Between Condo Insurance and Co-op Insurance

Condominium (condo) and cooperative apartment (co-op) insurance are quite different and more complicated than homeowner insurance. Let’s take a look at how condo and co-op insurance works, how it relates to association policy, and the responsibilities required of you in the event of a claim.

What You Need to Know About Condo and Co-op Insurance

Owning a condo in NYC makes you the property owner of your unit. A master insurance policy covers the structure of the condo as a whole, while the individual condo unit owner is responsible for protecting your own personal liability, specific unit features, and personal property.

On the one hand, co-ops are more or less multi-unit apartment buildings owned by a corporation, while the individual holds ownership only to a share of the corporation’s holdings. As a communal property, co-ops can be unevenly divided according to the number of shares each individual or owner has bought. A co-op insurance policy needs to insure an individual much like a tenant policy for an apartment building, as the individual is only insuring his/her personal property while the rest of the building, managed by the corporation, will be covered by a separate policy.

Differences Between Condo Insurance, Home Insurance, and Co-op Insurance

While condos, co-ops, and houses might all be living spaces, both legally and financially speaking their circumstances vary, which is why each mode of insurance varies too.

In all living arrangements, there is a difference in building ownership. The condo is divided into units, each unit owned by individuals whose purchase includes the walls, ceilings, and floors of their space, but not the building itself. As a result, the condo insurance coverage is only able to insure an owner’s unit and its content, nothing more.

The co-ops insurance, on the other hand, is split into two, whereby the owners of a percentage of the building insure their personal property while another policy covers the building managed by the corporation. Therefore, the tenant insurance will be in the co-op owner’s name while the building will be in the corporation’s name.

Meanwhile, a homeowner insurance policy covers both the building and its content. It is in the name of only the owner of the house and property as there is only one owner.

Do You Really Need Condo Insurance?

Since most basic buildings operated as condominiums and co-ops in New York are already insured on the condo or homeowner association policy, most people think everything is covered and refuse to purchase an individual policy. However, having your own insurance is needed so there are no surprises or extra expenses in a claim.

Policies You Need for a Condo

The two insurance policies that cover your investment in your unit and your personal belongings are your own insurance and the master policy managed by the co-op board, condo, or homeowner association. Your own condo insurance covers:

  • Personal liability.
  • Personal property.
  • Improvements, betterments, additions, or alterations.
  • Loss assessment.

Claims involving the building and your unit will have you relying on both the building master policy and your own policy for settlement as a necessity. If there is a third party involved like another unit owner, his or her policy can also come into play. For example, a common type of claim for condos and co-ops in which several policies are required to cover losses is water damage claims.

Understanding and navigating the different types of policies required for your particular living situation can be difficult. If you have any questions regarding insurance policies for condos, co-ops, or other buildings, contact our experts at Premier Risk, LLC to get started! We serve Long Island and neighboring cities in New York.

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