Condominiums are a difficult subject in insurance because of theintersection of the unit owner's policy and the association'spolicy. Where exactly do the two policies meet?

Who is responsible for what part of the building is a common andconfusing issue. A year or two ago, we presented a wildly popularweb seminar explaining just how the coverage worked. Recently,fellow FC&S expert Diana Reitz blogged about improvements and betterments, so now seems to be a good time totalk about condominiums.

When dealing with condominiums, one of the first things todetermine the unit owner's or the association's responsibility forparts of the property. Obviously, the unit owner's sofa is hisresponsibility and the association is responsible for the roof, butthe interior walls, plumbing, and other parts of the property arenot so obvious.

This is where a lot of confusion reigns. However, each state hasa set of statutes that dictates who is responsible for what part ofthe property. These statutes define common elements, unitboundaries, and insurance requirements. The statutes are extremelyhelpful when trying to sort out condominium coverage.

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When a condominium is being built, the developer creates adeclaration that provides organizational structure by which thecondominium is organized. The declaration must adhere to thestatute requirements, and the declaration then becomes a documentof guidance for the association and the unit owner.

From here, the association's policy and unit owner's policy canbe tailored to cover required portions of the unit and building.Using the developer's declaration page and statutes allows for theproperty to be properly covered with no gaps between policies.

While all of this makes it sound easy, we all know howcomplicated it really is, so here's a totally shameless plug:“TheCondominium Insurance Coverage Guide” addresses all of thesefactors and how to work among them in answering coveragequestions.

What have been your toughest condominium situations?

This blog post is meant to provide insights into insurancecoverage issues in general, and does not necessarily account forthe differences in law and practice in different venues. As such,the opinions expressed within should not be construed as legaladvice for the unique circumstances of any particular claim orsuit.