INSURANCE
Master Insurance Policy: The Property Insurance is with CAU through our Agent,
Rodman Insurance.
The purpose of this section is to clarify the scope of property insurance coverage
afforded by your master insurance policy written with Community Association
Underwriters (CAU) through Rodman Insurance Agency.
You are reminded that the master policy provides property coverage for all
permanently installed fixtures, improvements and betterments within your unit
against covered causes of loss, whether those items are originals or replacements.
That coverage, however, is subject to the following deductible:
$10,000 PER UNIT FOR ALL COVERED CAUSES OF LOSS(SPECIAL
FORM)
It is the Board’s policy that losses (or portions thereof) not exceeding the
association’s deductible shall be the responsibility of the unit owner(s) involved
in the loss.
As a result, it is imperative that you check with your own agent to make sure that
your Unit-Owners Policy (HO-6) provides adequate coverage to meet any
deductible obligation that you might have. It is suggested that your coverage
include $20,000 under “Coverage A - Dwelling” to respond not only to the
association’s deductible but to losses that might be excluded under the master
policy. Your coverage should also include the “Unit Owners Special Coverage A”
endorsement (Form HO-1732). PLEASE CONFIRM WITH YOUR AGENT
THAT YOUR POLICY WILL RESPOND TO THE ASSOCIATION’S
DEDUCTIBLE.
The master policy DOES NOT provide coverage for your personal effects (i.e.
clothing, furniture). You should discuss all of your specific coverage needs with
your own agent as this information is intended only as a general guide.
If you have any questions about this issue, please call me directly or have your
agent call me at 781-247-7888. If your mortgagee requires a Certificate of
Insurance, please contact Sarah Hale at 781-247-7809. You can also obtain a
certificate by visiting our website at www.rodmanins.com and clicking on “Condo
Certificates” to create your own.
Insurance Coverage: We would like to take this opportunity to clear up any confusion
with respect to the Master Insurance Policy (Building Coverage) vs. the individual Unit
Owner Policy (H-06).
The Master Insurance Policy covers damages to the buildings with limits up to
$40,150,000 and includes permanently installed building items such as flooring, kitchen
cabinets, etc., (basically anything you would not take with you if you moved) regardless
of how your by-laws are written – but - they are subject to the $10,000 per unit, policy
deductible.
Therefore, there is a need to carry at least $10,000 on the “Dwelling or Coverage A”
portion of your homeowner policy which covers the cost of the Association’s
deductible. Our Agents recommend $20,000 on dwelling.
With this in mind, we have put together an informational package as it pertains to our
Master Insurance Policy as well as the individual Owner’s Policy (HO6). We urge all
owners to take a few minutes to review the following information and check with your
own carriers, so that you can make an informed decision and can be sure you are not over
or under insured on your own homeowner policy.
If, after reviewing this information, you have any questions or concerns, please do not
hesitate to call me (978)532-4800, ext. #232.
Our goal is to provide excellent coverage in the event of a significant loss. This
means smaller claims (under the $10,000 deductible are being processed through the
unit owner policies). In the event of a catastrophic loss, the building(s) would be put
back to its original condition. The Insurance Company would pay up to $40,150,000
less the $10,000 per unit deductible.
Over the past 2 decades, I continue to be amazed that some unit owners do not have
insurance because they believe that there is a master insurance policy and they do not
need additional coverage. This is not the case at all. In some cases, I have found many
unit owners have too much coverage. If you have purchased a Home Owner Policy
(HO6) and your insurance agent did not ask to look at your condominium bylaws and a
copy of the Master Insurance Policy, you may not have adequate coverage. You may
have too much or too little.
Frequent losses adversely affect our premiums and ability to secure insurance in the
future. It is important to limit the amount of claims, not only to keep costs down, but also
to enable us to obtain insurance each year. While we realize that some things are beyond
our control, unit owners are reminded that you are home owners and you have certain
responsibilities to protect your home, i.e. turning off the water to your units if you will be
away for an extended period of time; periodically checking your washing machine hoses
to be sure they are not ready to let go and to be sure the valve is off when not in use;
regular maintenance of heating and cooling equipment and water heaters and replacement
when at the end of its useful life, etc.
The big question is “How does the Master Insurance Policy coordinate with a personal
condo owners’ policy?” A condo owners’ policy (HO6) is structured as follows:
Coverage A - Dwelling: The Master Insurance Policy for The Green Dolphin should
cover the entire unit except the unit owners’ furniture, furnishings, and personal property.
Therefore the unit owner need to have enough Coverage A to cover the Master Policy
Deductible; however, our agents are now advising owners to carry additional dwelling to
cover such costs that may not be covered by the master policy, but are covered by the
owner’s policy, i.e. water seepage. This is something you will want to discuss with your
own insurance agent. This deductible is currently $10,000. Check the declaration page of
your individual homeowner policy to be sure you have proper coverage. If you have
more than $20,000 you may find, you have too much coverage under this section.
Coverage C: Personal Property: The master provides no coverage for personal
property. Each person must decide what it would take to replace his or her personal
property. Per the By-Laws, each person should insure his or her furniture, furnishings
and personal property.
Coverage D: Loss of Use: This is a big coverage that receives very little attention. If a
unit was unlivable and it took a year to rebuild, where would you live? This coverage
provides the coverage for this expense. It is based as a percentage of your coverage C.
Very often, we see coverage as low as $5,000. This coverage should be carefully
discussed with your agent. If you needed to rent an apartment while your unit is being
reconstructed, how much would you need?
Coverage E: Personal Liability: Excluding auto use and commercial activity, this is
where an individual obtains personal liability protection for bodily injury and property
damage to others. We have been advised to recommend purchasing at least $300,000 in
protection and an additional $1,000,000 in umbrella coverage.
Replacement Cost on Dwelling & Contents: Provides new for old when personal
property is destroyed by covered perils (Fire, Lightning, Windstorm, etc.)
Unit Owners All Risk Coverage A & C: Changes coverage from named perils, i.e. wind
damage (no coverage unless peril is named in policy) to coverage unless peril is
specifically excluded in policy. This is a major increase in coverage. In other words, if
you do not have “all risk coverage” and your policy does not specifically state you are
covered for wind damage, then it is excluded from your policy. If you do have “all risk
coverage” the policy would need to state that wind damage is not included, otherwise it is
included.
Loss Assessment: Should the master policy be unable to adequately cover a covered loss,
this coverage should protect you to the amount purchased for assessments made by the
board after a loss. For example, if there was an Earthquake, while the company provides
coverage, it is subject to a substantial deductible (5% of the loss). We would more than
likely need an assessment to cover this. Owners with loss assessment coverage should be
covered for this assessment.
Special Limits Increase / Scheduled Coverage: Every HO6 has a special list of items
with reduced coverage such as $1,000 for loss of jewelry by theft.
Umbrellas: Umbrellas or excess liability inexpensively increases liability coverage over
both personal liability and auto liability as well as vacation homes and boats.
Please discuss the above with your agent to determine what is appropriate for you.