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A Practical Guide for Condominium Owners and Cooperative Shareholders on Insurance

Co-ops and Condos

What Do Condominium Owners and Cooperative Shareholders Have to Insure?

As with most obligations involving condos and co-ops, it is always wise to check governing building documents. Declarations, bylaws, and house rules are a good place to start. Within those documents, one is likely to find out which parts of the building are covered by the master policy versus the individual owner’s or shareholder’s insurance policy. In most instances, condominium owners and cooperative apartment shareholders must ensure that they have adequate coverage for their personal belongings, improvements made to their units, and any personal liability they may incur. They should always share building documents with their insurance brokers and companies to confirm that issued policies comply. The Condominium and Cooperative lawyers at Guzov, LLC can assist owners and shareholders to ensure that they have appropriate insurance coverage that aligns with insurance requirements.

What will the budget for insurance look like in New York City? 

In New York City, very basic condominium or cooperative insurance for individuals typically begins at approximately $640 annually. This level of coverage may include up to $50,000 for contents, with similar limits for walls, floors, and liability up to $300,000. Prospective purchasers of apartments valued in the mid-six figures or higher are advised to opt for higher insurance coverage to adequately safeguard their assets. Costs vary based on location and policy comprehensiveness. Generally, premiums range between $2,000 and $3,000 annually per $1,000,000 of personal property and unit additions.

Are there any other special considerations to address? 

Special considerations must be taken into account if the owner/shareholder has a mortgage. It is essential to understand the lender’s requirements and properly name the lender as an additional insured. Mortgage lenders have varying requirements depending on whether the property is a condominium or cooperative. Condominium owners typically face stricter requirements, needing insurance for interior structures equivalent to at least 20 percent of the loan value. In contrast, some cooperative lenders may only require inclusion on the building’s master policy, although individual insurance is still advisable for comprehensive protection.

Both condominium and cooperative apartments in New York City emphasize the importance of adequate liability coverage due to the frequent occurrence of water damage incidents in apartment living. Most governing documents require residents to handle claims independently to avoid invoking the building’s insurance policy. Additionally, sufficient coverage ensures residents can promptly rebuild after significant losses.

If you would like to discuss compliance with condominium and cooperative building bylaws and insurance requirements, or any issues relating to cooperatives and condominiums, please contact us to schedule a consultation.


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