Living in a condominium has many advantages. In exchange for paying association fees, the unit owner is not burdened with exterior maintenance of the building or common areas. Also, many condominium developments offer fantastic amenities such as playgrounds, workout rooms, and swimming pools all conveniently located on the property. Plus, the depressed housing market in Las Vegas has made purchasing a condominium more affordable than ever.
Unit owners, however, have slightly more complicated insurance needs compared to the owner of a single family home. To understand what type of insurance the unit owner should purchase, we need to first look at the coverage provided by the association.
The HOA Master Policy
The condominium association should provide a “master” policy that covers the structures, common elements (pools, clubhouse, etc.), and general liability for the premises. The board of directors will usually purchase directors and officers coverage to protect themselves from claims related to the administration of association business.
Master policies are not all created equal. Policy verbiage will vary from one insurance company to another. The association CC&R’s will also specify what property is the responsibility of the association versus the unit owner. Most master policies issued today provide “single-entity” coverage meaning the association will cover virtually all building property, including fixtures, in a condominium unit. Some associations specify they will cover only the original fixtures as supplied by the builder while other policies cover all upgrades made by the unit owner. Obviously, it is important that the condominium unit owner understands the details of the association’s master policy.
Unit Owner Insurance – the HO6 Policy
Condominium unit owners should purchase their own insurance policy, commonly known as an HO6 (homeowners form 6). This policy will coverage for contents, loss of use, loss assessment and premises liability. Depending on the unit owner needs the policy can also include interior building coverage (flooring, fixtures, attached appliances, etc.). At a minimum we recommend a condominium unit owner carry the following coverage:
- Building coverage of at least $25,000
- Contents coverage at total replacement cost
- Loss assessment coverage of at least $10,000
- Liability coverage, including personal injury, of at least $300,000
- Guest medical of at least $1,000
- Loss of use or additional living expenses
Fortunately, condominium unit owner insurance is very affordable. For units located in Las Vegas, North Las Vegas, and Henderson the annual premium starts at around $150 per year depending on your coverage needs. At Safeguard Insurance, we have access to 12 different providers of HO6 insurance and can find you the best value for this coverage. Contact us today for a free, no-obligation proposal!