Owning an apartment or a co-op residence is quite different from owning a home. In the case of owning a home, you’re responsible for the protection of the property as a whole – yard, home, everything in between. As a member of a co-op residence, your insurance coverage is a little different.
As the owner of a co-op property, you won’t be the outright owner of the building in which you live, but rather a co-owner who owns their living space. You’re in charge of your home and everything within its walls, but the community who lives in the same building is in charge of the building as a group. This means if something happens to the building, you’re all equally responsible for the costs but if something happens to your personal home, you’re solely responsible.
The same should be seen from your insurance policy. If something happens to the building, the community’s insurance will cover the cost of repairs. If something happens to your home, well that’s why co-op insurance is important because without it, you’ll be financially responsible to cover your own dwelling and everything within it.
Co-op insurance is different from homeowners insurance as in a co-op you only own your apartment, not the whole building and your insurance covers your apartment, not the whole building. In the event that you own your home, then homeowners insurance covers the whole property.
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Master co-op insurance policy
The master co-op insurance policy is the insurance paid for by the whole community living in the building. Typically, this insurance is paid for as part of your maintenance fees or association dues and is looked after by the building’s management. You most likely won’t have to call the insurance company to file a claim under your master co-op policy as the building will take care of that for you. You will need to pay your part of the premium to cover this community insurance.
This insurance covers everything in the building that isn’t yours or any of the other tenants’ possessions. Anything from the common spaces, basement, elevators, stairs, walkways, roof, etc. If it’s not part of someone’s apartment, then the master co-op insurance policy will cover repairs in the event of any damages.
Sometimes, your building may be responsible for all original structures even if it’s a part of your apartment. This means that you and your co-op insurance will only be responsible for any additions or renovations made to your living space, along with any possessions that aren’t part of the original structure of the building.
Other buildings may not have this more inclusive policy and may only cover common areas and the walls surrounding your home. In this case you will be responsible for everything within your walls; appliances, furniture, all rooms, etc.
Check your building’s policy on insurance to find out which type of master co-op insurance your building has. You don’t want to assume you’re covered to replace your counters and find out your building’s insurance is not responsible for that.
Individual co-op insurance policy
The individual co-op insurance covers your personal dwelling and is to be paid for and researched by only you. You will be held responsible with getting your individual co-op insurance and in some cases, you might not have to. Most of the time mortgage lenders will require you to purchase co-op insurance before they let you settle on the apartment or condo, but there are cases where you do not have to.
It’s highly recommended that you do as you will be responsible for everything within your walls and in a multi-apartment building, more risks of damages are present. If the building burns down, your master co-op plan will cover the repairs necessary for the building. Your own possessions, however, will not be covered. For this reason, most people buy a policy of co-op insurance on top of their building’s master co-op policy.
Everything in your apartment can add up to a hefty bill in the event of a disaster: furniture, jewelry, pets, liabilities, etc. If your apartment goes up in smoke, without an individual co-op policy, so may your financial situation.
When searching for a good co-op, don’t be afraid to look for discount opportunities. Sometimes if you contact the insurance company that your master co-op policy is under, they might grant you a discount.
What is covered under your co-op insurance?
Besides the basics: everything within the walls of your condo or apartment, your co-op insurance covers some different areas of living.
- Dwelling – Your home and everything it entails; walls, rooms, furnishings, etc. will all be covered by your individual co-op policy.
- Belongings – Everything inside your home that you own will be covered by your co-op insurance. If your personal property is damaged in a disaster, you will be covered.
- Personal liability – If you are sued or have been found to accidentally bring harm to others, you may be covered by your co-op insurance policy.
- Medical – Any medical issues or needs of emergency services should be covered if they occur under the roof of your dwelling.
- Loss of use – If the building burns down and your apartment is lost and uninhabitable, your co-op insurance will cover your accommodation costs.
Along with the basic covered repairs, there can be extra coverage options. Speaking with your insurance company to find out what is fit for your building will help. Some extra costs like sewer back up or apartment assessments will not be covered by your basic co-op plan and will be part of the additional charges.
Cost of co-op insurance
Depending on your insurance policy, co-op insurance could be relatively cheap. Co-op insurance can be half as expensive as homeowners insurance. This on top of any discounts you may be applicable for could you leave you with a cheaper co-op insurance policy.
Another factor is how much added coverage you purchase. Speak with your insurance company to find out what policies might be best suited for you and your apartment. Look into your master co-op insurance policy to see what remains for you to cover and buy your insurance accordingly.