Insurance is designed to be there for us when we need it most. Without knowing the full extent of our coverage, though, we may find ourselves with less protection than we thought. For condominium owners, it is imperative to understand exactly what liabilities and risks are covered by individual resident homeowner policies and what is covered by the building’s policy. Knowing exactly what is protected and by whose policies is imperative in ensuring that properties and possessions are in good hands should an emergency arise.
“Many unit owners don't understand the limitations of the association's insurance and thereby think that they don't need to obtain their own insurance,” says Matthew Zifrony, director at Tripp Scott Attorneys at Law in Fort Lauderdale. “They mistakenly believe that their unit is fully covered by the association's insurance. Others don't understand how Florida Statutes actually obligate them to obtain and maintain hazard insurance that covers the portions of their unit that aren't covered by the association's policy. Others don't understand how the association's liability insurance—i.e., insurance that covers harm to person when they're in the unit—likely doesn't provide any protection against liability claims that arise in a particular unit.”
Attorney Rachel Frydman of The Frydman Law Group in Plantation agrees. “Many owners believe the association’s insurance policy will cover damage to their personal property in the event of a casualty or will cover damage to a neighbor’s property due to a leak in their unit,” she says. This is not the case. “Owners will become personally responsible for damage sustained by a neighbor should his or her toilet or bathtub leak downstairs, or should his or her water heater explode. Having insurance will cover the damage as long as the owners are not deemed negligent in the maintenance of these items.”
Know Your Insurance
In order to avoid problems later, it is important for unit owners to learn as much as they can about their own policy, their building’s policies and where any gaps may exist. In general, says Zifrony, “a condo association's hazard insurance policy covers all portions of the unit except personal property,” such as floor, wall and ceiling coverings, electrical fixtures, appliances, water heaters and water filters, built-in cabinets and counter tops, and window treatments. The individual policy is designed to cover everything that the condo association's policy does not.
Jon Moller, who is with the insurance firm Brown & Brown of Florida, Inc., in Fort Lauderdale, adds that the easiest way to understand what the unit owner must cover versus what the building covers is that “the unit owners’ insurance covers everything in the unit from the ‘paint in.’ The association is responsible for everything else including the drywall and common areas.”