Condominium Homeowners Face Complicated Insurance Issues
No space of residential property insurance coverage is more complicated or litigated than rental proprietor’s insurance coverage policies. This fact has not too long ago grow to be more complicated for Maryland condominium owners. Insurance coverage problems typically arise when two or more insurers are concerned in a claim. In this case it will be the rental association grasp insurance coverage policy and the unit proprietor’s private policy (HO6).
In response to the problem, The Maryland Condominium Act was amended efficient June 2009 stipulating that condominium grasp property insurance coverage policies must cover each widespread elements and particular person units. Additionally, unit house owners could be held accountable for as much as $5,000 of the grasp policy deductible if the cause of the injury originates in the unit Condo owner insurance.
Will that proprietor have any coverage beneath their HO6 rental unit proprietor’s policy to pay the $5,000 deductible for which they might now be accountable? That query will little question be tested extensively. The $5,000 won’t be paid beneath the “Loss Assessments” coverage. It ought to come from the Protection A “Dwelling” part of the unit proprietor’s policy. Many rental unit house owners, figuring out that the grasp policy covers the building, select a low restrict or do not insure themselves at all for which is a big mistake.
For those who personal a rental unit in Maryland, you must take the next steps to guard yourself. Test your policy for the Protection A “Dwelling” limit. Guarantee it is sufficient to cover the association deductible, your enhancements, some other building or property that you’re required to cover by the association agreement. Guarantee that you’ve got a “Particular” or “All-Risks” coverage form.
Most condominium losses are associated to water injury from leaky or broken pipes. The fundamental rental unit proprietor’s policy won’t cover such water damage. Ask your insurer or agent if there’s an Extended Protection Endorsement that can be added. These endorsements, when available, supply very broad coverage at an inexpensive rate.
For those who serve on the Board of Administrators for your condominium association, ask about a non-revenue Administrators and Officers endorsement to cover you personally from errors and omissions complaints in opposition to the board. Submit a copy of the association settlement to your agent or insurer for review. Condominium agreements are sometimes unclear about insurance coverage necessities and deductible assessments. Nonetheless, it is important that all legal liabilities of the unit house owners be spelled out in detail.
Take the time to make sure that your association is taking the steps that they should take to clarify all ambiguities. This new Maryland legislation clarifies that the grasp policy is liable for losses and that the unit house owners could be liable for part of the deductible. No matter how much insurance coverage is carried, the unit proprietor’s insurer might not cover the $5,000 deductible until the association contract clearly establishes a legal responsibility to do so.
Do not leave yourself exposed to an uninsured expense after a large loss. Test your coverage and ask questions. For those who shouldn’t have unit house owners insurance coverage, contact an agent to acquire a quote. It’s better to be safe than sorry.