The master policy is the one the whole building relies on. It is worth knowing what it says.

Master property policy

The buildings and the common elements, on a bare-walls, single-entity or all-in basis as the bylaws direct, at replacement cost with an ordinance-or-law extension for code upgrades after a loss.

Without it — A policy on the wrong basis leaves either the association or the owners uninsured for the finishes inside the units, and the argument starts after the fire.

General liability

Injury and property damage in the common areas: the pool, the parking lot, the stairwells, the roof deck.

Without it — A slip on an icy walkway is a claim against the association, and the association is every owner.

Directors and officers

Claims against the board and its members for their decisions: a disputed assessment, a denied architectural request, a discrimination allegation, a mishandled election.

Without it — Volunteers serving on the board are personally named. Without the policy, the association pays the defense from reserves or the board members pay it themselves.

Crime and fidelity

Theft of association funds by a board member, an employee or the management company.

Without it — Fannie Mae and Freddie Mac require it for the mortgages in the building, and a management company handling the reserves is the most common way the money leaves.

Umbrella

Limits above the general liability and D&O, usually $5 million or more for a building of any size.

Without it — A drowning in the pool or a balcony collapse is a claim that exhausts a primary limit.

What is the difference between bare walls, single entity and all-in coverage?

Three ways the bylaws can divide the building between the master policy and the owners. Bare walls insures the structure only; single entity adds the fixtures and finishes as originally built; all-in adds the owners' upgrades too. The bylaws or the state condominium act choose, and the master policy has to match. Getting this wrong is the most common condo insurance error and it is invisible until a claim.

How much does condominium association insurance cost?

It depends on the building more than the market: age, construction, the plumbing and electrical, the claims history, and whether it is in a wildfire, wind or flood area. A small wood-frame building with a water loss or two behind it has become expensive to insure in recent years; a newer masonry building with sprinklers and a clean record is not. The application asks about all of it, and a board that knows its building gets a better answer.

Is directors and officers insurance required for a condo board?

Most bylaws require it and most lenders expect it, and the volunteers on the board should insist on it, because they are personally named in suits over decisions the board made. The premium is modest for what it does.

What does a condominium association insurance application ask for?

The habitational applications we work from ask the year built and any updates to the roof, plumbing, electrical and heating, the construction and number of units and stories, whether there is a pool, elevator or parking structure, the percentage of units rented rather than owner-occupied, the reserves and any pending litigation or special assessments, the management arrangement, and five years of claims. Bring the reserve study and the bylaws; the application follows from them.

What a statement of values lists

Why has our condo insurance premium gone up so much?

Water losses in aging buildings, wildfire and wind exposure, and the cost of rebuilding have all risen, and carriers that once wrote any condo now decline older buildings with claims. A board that has replaced the plumbing, documented its maintenance and raised its water deductible is the board that still gets competitive quotes.