Law Office of Jeanne M. Reardon
The master policy provided by your condo/co-op board covers the common areas you share with others in your building such as the roof, basement, elevator, boiler and walkways for both liability and property damage. If the roof of your condo gets damaged, for example, and water leaks into your unit, the master policy would cover the roof repair but not the individual repairs to your unit for damage to things like the ceiling, walls, carpets or furniture. In addition to property damage, the master policy will have liability insurance for common spaces, such as lobbies, hallways and sidewalks.
As the unit owner, however, you will need to purchase a personal home insurance policy (type HO-6). The building's master policy does not protect your personal belongings or offer liability coverage for occurrences within your unit. Your personal insurance policy will provide coverage for damages to your unit and your possessions, and additional coverage for living expenses if you are the victim of fire, theft or other disaster covered by your policy. Your policy should also provide for liability coverage. This way, you will have coverage for accidents that occur within your unit. If someone falls and injures himself in your unit, your policy would provide the liability coverage, not the building's master policy.
To adequately insure your unit, it is important to know which structural parts of your unit are covered by the master policy and which are not. You can do this by reading your association's bylaws and/or proprietary lease. If you have questions, talk to your condo association, management company, insurance broker or real estate attorney.
Be aware of the deductible on your building's master policy. If there is damage to the common spaces, every unit owner will be required to contribute money to reach the deductible. If the policy actually covers some damages that are specific to your unit, you will have to reach that deductible yourself. As a unit owner, you would want your personal policy to cover the difference between your individual policy deductible and the master policy's deductible, if you are required to use the building's insurance for something like a burst pipe.
Finally, make sure your policy has coverage for unit assessments. Unit assessments are fees charged to unit owners to pay for repairs to common areas or property. If your building is damaged by an insured disaster, and the cost of that damage is not fully covered by the master policy, this type of coverage would pay for your share of an assessment charged to all unit owners.