Filed Under (Real Estate) on 26-04-2012
If you own a condo or town home in a HOA-governed community, you may wonder how much property insurance to buy. After all, won’t the HOA or “common interest community association” buy property insurance? Where does your responsibility for damages begin and the association’s end?
What the law says
Colorado law, as stated in the Colorado Common Interest Ownership Act, requires that your association buy property insurance to cover units stacked on top of each other. Associations are not required to cover “the finished interior surfaces of the walls, floors, and ceilings of the units” –– although they may do so.
The association’s policy does not need to cover improvements installed by unit owners. (If improvements are covered, the association must charge owners for additional insurance fees).
Your HOA’s governing documents or declaration may provide more detail.
And finally, these rules generally only apply to common interest communities created after July 1, 1992, when the CCIOA went into effect.
Given these complexities, it may be difficult to tell exactly what your association’s master insurance policy covers. That, in turn, makes it difficult to determine how much coverage to buy.
For instance, the association’s policy will have a deductible —or even different deductibles for different perils —that can be as much as $25,000 or more. You may want to consider coverage that protects you from a loss that would be covered by your association’s policy but that is less than the deductible amount.
What you need to do Continue reading “Colorado HOA Insurance and Condo Insurance for Beginners” »