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 facing an emergency with less protection than we thought. For shareholders or unit 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. Unfortunately, many co-op and condo residents misinterpret who is responsible for what. 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.
“Most unit owners do not have enough coverage for their unit as they are not properly advised,” says Lynn Delaney, branch manager at GFI Insurance Services in Monticello. “Co-op purchasers are often told by lenders that they do not need coverage as it is not required for the loan. Obviously whether it is required for a loan or not, they do need coverage for personal belongings and liability as well as building property coverage.”
Patti Berman, an insurance specialist at Masters Coverage Corp in Manhattan, adds, “A lot of residents feel that their units are covered by the building and do not feel that they have to get homeowner's insurance.”
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 a co-op or condo, you must first look at the proprietary lease or original offering plan which outlines where the building property stops and the personal property begins,” says Arthur Schwartz, senior vice president of Masters Coverage Corp.