Insurance companies offer Dwelling Coverage, which generally insures the interior walls, drywall, wallpaper, paneling, flooring, carpeting, or built-in cabinets. This is the coverage you need to cover your part of the building; the unit you own.
As a condo association, you all take responsibility and ownership for the common areas, the exterior of the building, and energy equipment. The interior of your unit, however, is your responsibility, and it is important to make sure your real estate investment is protected.
Some condo “Master Policies” provide all-in coverage. This means the entire building, including your unit, are covered. Check your condos Master Policy and find our if it covers your individual unit. If the Master Policy doesn’t cover your unit, you need individual Dwelling Coverage.
Dwelling Coverage usually covers damage resulting from:
Freezing of plumbing
Accidental discharge or overflow of water from your plumbing
Fire and lightning
Theft, vandalism and malicious mischief
Sudden, accidental damage from smoke
Weight of snow, ice and sleet
Sudden, accidental tearing, cracking, burning or bulging of a steam pipe or hot water heating system.
Dwelling Coverage does not cover damage caused by:
Earthquakes, floods, and in many states, hurricanes. If you want to insure your condo against these risks, you may be able to buy an additional policy or endorsement for each of these.
Theft by someone named on your condo policy as an insured party.
Do I need Dwelling Coverage for my unit?:
As noted above, your condo building Master Policy might have coverage for your unit. Find out if you have coverage and, if so, how much coverage and at what deductible.
Important note on condo docs: In some rare cases, your condo documents might say something different than your Master Policy. If your Master Policy says your unit is insured for dwelling, but your condo docs say otherwise, the condo docs control.
A claim adjuster would default to what the condo docs say, and you wouldn’t have coverage. Make sure your condo docs state the same coverage as your Master Policy. If you have no coverage with your building policy, you should purchase dwelling coverage for the full replacement amount.