A fire damaged my condo — what's covered and by whose policy?
Last updated: January 1
The shared living environment of a condo has its perks. You typically don't have to mow the lawn or shovel the walk. A condo board likely manages building upkeep. And you often have amenities like a clubhouse, pool or gym to enjoy.
But you also share the headaches when something goes wrong.
Take a fire, for instance. While it's a risk that's typically covered by a condo insurance policy, your risk for fire isn't limited to the conditions in your own unit. You may also be susceptible to fire from neighboring units or common areas.
And that can leave you wondering whose insurance pays when it comes time to file a claim.
Whose insurance protects your unit?
There's no broad answer that will cover every situation. That's because two different policies may help protect your condo from fire (and other risks):
If a fire breaks out, you (or your insurer) may have to pay for some damage, and the association (or its insurer) may be responsible for other damage. But those responsibilities can vary in different condo complexes.
Sometimes, an association's insurance will provide coverage for a condo as it was built, including basic fixtures such as the bathtub and appliances, the Insurance Information Institute (III) says. Your own policy would then help protect later upgrades or renovations, along with your personal possessions, up to your policy's stated limits.
In other cases, though, the association's policy will only protect the basic structural elements of your place (the walls, floors, etc.). Your policy would have to provide coverage for everything else: for instance, the kitchen cabinets, appliances and plumbing.
The only way to really know who is responsible for what in the event of a fire is to review the association's documents, such as the declarations or master deed, bylaws and its insurance policy (ideally before you ever experience a hardship).
Location of fire and damage matter
Even when a fire originates elsewhere — a neighbor's unit, or a stairwell, hallway or other common area of the building — there's typically no single answer that will broadly outline responsibility. It all depends on where the damage takes place and whether anyone is found liable.
In some cases, each of your policies may work in tandem, with your policy covering damage to your unit, and the neighbor's policy covering damage to that unit. And in some instances, the association's insurance policy may also kick in to pay a portion of the damage, depending on how the association's bylaws, declarations or master deed are written and, of course, where the damage takes place.
That's why it's important for you to obtain a copy of your condominium association's documents and review them with your insurance agent before you buy a policy. That way, you can be clear where your association's responsibility typically ends in case of a fire — and where your own begins.