| Q: |
What is covered in an association policy and what should individual unit owners include in their own policies? |
| A: |
Building policies obtained by associations typically provide coverage for all commonly owned
property amongst the units. It is important to understand individual unit owners need to
purchase personal insurance to cover several risks not included in the association plan.
Building policies typically include:
Perimeter and partition walls and ceilings (through drywall, plaster and primer)
Original cabinets and countertops
Original built-in appliances (those that are permanently attached and cannot operate free-standing)
Original plumbing and electrical fixtures, heat and air conditioning units
It is also important to note that common association liability coverage extends to common areas only-no liability coverage is provided within individual units. Typically the association liability policy includes workers' compensation and employer's liability as it applies to association employees only.
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| Q: |
What kind of insurance should individual owners obtain? |
| A: |
Most buildings require unit owners to purchase policies to cover personal property and personal
liability, however some buildings may differ. Unit owners are encouraged to refer to declarations
and by-laws for additional information.
Individual unit owners should consider the following when purchasing coverage for their unit.
Personal Property
Household contents (furnishings, clothing, etc.)
Storage area contents
Appliances that are not built-in such as refrigerators, dishwashers, stoves, etc.
Alterations, Improvements/Betterments
Decorating (finishing paint, paneling, mirrors, window treatments, etc.)
Floor coverings
Updated cabinets and countertops
Updated appliances
Updated plumbing
Personal Liability
For your unit and elsewhere
For domestic help, under the workers' compensation section
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| Q: |
Who is responsible if a pipe located on common property breaks, damaging my carpeting, decorating and personal property? |
| A: |
Oftentimes declarations state that the property mentioned above is considered the responsibility of the unit owner, regardless of where the problem originated. The most effective method of recourse in this situation is to file a claim with your personal insurance carrier. |
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| Q: |
What is AM Best Ratings and how do AM Best ratings impact my insurance? |
| A: |
AM Best is an organization that rates the financial strength of insurance companies. Its
mission is "to perform a constructive and objective role in serving the insurance marketplace
as a source of reliable information and ratings dedicated to encouraging a financially sound
industry through the prevention and detection of insurer solvency."
There are two types of ratings issued by AM Best.
- Best's Financial Strength Ratings - provide an opinion of an insurer's financial strength and ability to meet ongoing obligations to policyholders.
- Best's Debt Ratings - provide an opinion for the credit marketplace as to the issuer's ability to meet its financial obligations to security holders when due.
For more information about AM Best and its Rating System, visit their web site at
www.ambest.com.
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