Are you considering buying a condo? Association life can be a great choice! Not only can homeowners put aside the outdoor workload like mowing the lawn or raking the leaves, but it can be cost-effective to a home of comparable size, and the community amenities can be a great perk! 

The differences in the style of living are not where condo living stops, however. There are some major differences in insurance. If you have never been a part of a Homeowners Association or community living, then you will need to educate yourself about the differences between the Master Insurance and Unit Insurance. Here are some important questions you will want to ask before you sign on the dotted line. 

What Kind of Master Insurance Does the Association Have? 

The most common HOA (Homeowners Association) Master Insurance is the studs-out coverage, which essentially includes everything outside of your unit; for example, the common areas, amenities, roof, siding, parking lots, and so on. The HOA insurance would step in for incidents regarding the basic building — like if hail damaged the roof, the elevators broke down, or a car crashed into the lobby. That would leave you in charge of everything inside your unit, including structural elements such as walls, fixtures, flooring, and cabinets. This is why it is important to not only have your community’s Master Insurance but an individual insurance that covers all of your stuff including appliances, wardrobe, furnishings, valuables, and technology. 

What are the Limits of the Master Insurance? 

Depending upon the damage, every insurance has a limit when it comes to coverage. Let’s just say that a storm damages your building. Make sure you ask what the limit to coverage is for your community before the homeowners need to tap into their own individual insurance. If said storm exceeds the limits, it may end up being the responsibility of those homeowners to make up the difference. Find out the limits when you decide to buy a condo. 

What If I Renovate? Will My Insurance Change? 

Lots of condo owners decide to update bathrooms and kitchens to their liking. Those upgrades may change the amount of dwelling insurance you need. But before you increase the limits on your own coverage, check with your condo Master Policy. Some HOA plans cover improvements to the unit, which could save you a bundle.

Will the HOA Regulate My Insurance on My Unit? 

In some cases, your HOA will require a certain coverage you should carry or even which company you need to buy your policy from. Always ask first. We also suggest that you ask your individual unit insurance agent to review the policy to be sure there are no gaps in your coverage should an event occur.