Legendary funny man Benny Goodman once said, “I don’t want to tell you how much insurance I carry with the Prudential, but all I can say is: when I go, they go too!” The comedian hits on all-important issue: how much insurance is too much, and how much is not enough?
When it comes to homeowner's insurance it is critical that both residents and boards have adequate policies and there are not gaps in coverage.
As a starting point, it is important that residents ensure their personal property is covered. The co-op or condo's bylaws and proprietary lease will help residents determine what will be covered by the building and what is considered their personal property to insure. Anything not covered in the master policy is the resident's responsibility and this varies building by building. While some co-ops and condos offer all-in coverage in their master policy, the vast majority require unit owners to carry their own individual homeowner's policy as well.
According to insurance industry blog www.InsureOurCondo.com, these insurance policies usually cover things like accidental discharge or overflow of water from your plumbing, fire and lightning, explosions, theft, vandalism and malicious mischief, sudden accidental damage from smoke, and so forth.
After this, residents need to assess their personal property and possessions in order to determine a coverage amount for their unit, says Mari Ann Cole, president of Long Island Coverage Corp., an insurance brokerage in Hauppauge. “Most insurance companies have a cost evaluation that is done over the phone which includes the number of rooms, the number of people residing in the unit, location and the value of the contents,” she says. “For the bare minimum we start with $75,000 in contents but that number can be reached very quickly in today's world.”