Condominium insurance is unique because it integrates the interests of the condominium association with the interests of the owners of individual units. While each unit owner has a proportional interest in the association, they also have distinct and separate interests of their own when it comes to coverage concerns.
The structure of a Massachusetts condo insurance policy is important, and this structure is normally defined in the Master Deed. One of the most important initial details is where the line is drawn between the responsibilities of the association versus those of the unit owners. Ownership is defined in the Master Deed so, when buying a condo unit, an owner should always get a copy of the Master Deed, as well as association by-laws.
The condominium structure includes everything inside the condominium units. This “All-in” approach typically will include additions or alterations that a unit owner makes, such as adding new cabinets, an alarm system, or any other improvements, provided the unit owner provides information about these additions to the association.
The association is then responsible for providing insurance for everything that is permanently attached within the condominium structure. Anything that is not “attached” and will remain part of the unit after the owner sells or vacates, such as furniture and other personal property, is the responsibility of the unit owner. Everything else that stays attached to the structure is insured by the association policy.
The unit owner is solely responsible for the “bare walls”
This refers to the bare walls of the building, and leaves a greater responsibility on individual unit owners to insure their owned portion of the building. In the Master Deed, the “bare walls” approach uses wording such as “on the plane of the interior studs”, or “the plane of the lower side of the roof rafters”, or ”the top surface of the sub-flooring”. This simply means that the unit owner owns all the drywall, wallpaper, paint, flooring, etc. and is therefore responsible for insuring these items personally.
Everything, including the bathtubs, toilets and sinks, kitchen cabinets and counter-tops would not be covered. Remember, insurance usually follows ownership. The condo association insures only the shell structure plus common mechanicals such as heating systems, common plumbing, and common electrical; the rest is the unit owner’s responsibility.
It is important to understand the language of such contracts before entering into one. If there is any uncertainty, speak to a reputable agent and always carry adequate amounts of Massachusetts condo insurance.