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Insurance?

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The age old question of whether to get insurance or not. In home ownership, it is critical to have the proper insurance, and to make sure the building association’s insurance policies protect both the building and the unit owner. There are different types of insurance available for condo or co-op owners. Mildred Ayala, a manager of the HUB International Insurance office in New York says, “There are several basic components to a typical condo or co-op homeowner’s policy. They include additions and alterations coverage, coverage for personal property and contents, loss of use, and liability and medical payments.”[1] Although insurance policies may differ from state to state, usually they all have a basic policy template that all states use. “The basis of claims in homeowners policies has to do with responsibility.”[2] Homeowners policies are different in New York City because different rules apply to apartment buildings than to detached homes. The biggest issue is finding the cause of an problem when there are multiple apartments involved. When there is an issue with a leaking pipe, it depends “on the definition found in the co-op or condo’s governing documents as to whether it’s the association/corporation or the unit owner who’s responsible for pipes inside the common walls. Usually, everything inside the walls is considered a common area or element, and is therefore the responsibility of the co-op or condo to maintain, repair, and replace.”[3] There is a difference between a private feature of an apartment, and what affects the common space of the building. It is all usually defined in the governing documents of the building, which spell out what is the responsibility of the unit owner versus the building. It might be useful to take a look at those documents to fully understand your rights and responsibilities as a unit owner. When there is damage done in one apartment that was caused by another, usually the building insurance policy will pay for the cost of repairs, and collect insurance money from the apartment that was responsible for the damage.

The smartest thing that a potential apartment buyer can do is to make sure that they are covered in case of emergencies, and not paying huge deductibles. It’s important to do some due diligence, and check the building’s policies. Assuming that certain aspects will be covered is foolish. Martin Cabalar, an attorney in New Jersey says, “Unit owners should be sure to discuss with their broker whether they have appropriate coverage for their unit – including reviewing the association’s policy to determine whether there are any gaps in coverage. In the end, responsibility is a legal determination – so if you have any questions, seek the advice of legal counsel.”[4]


[1] Sidransky, A.J., (August 2018), Responsibility for Repairs

[2] Ib.

[3] Ib.

[4] Ib.

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