Common "cents" ins. advise for co-op and condo owners

According to my friends on the residential side of this business, condo and co-op sales are about the only thing that's selling and holding their value. That being the case, existing and new condo or co-op habitants "need to think like a single family homeowner when it comes to having adequate insurance protection," said William Cooper Colwell, a New Rochelle-based insurance agent who once owned a co-op and served as president of his association's board. "All of the usually unpredictable happenstances that can negatively impact the property of a single family home can also impact a co-op or condo owner." While your co-op or condo association's "master insurance policy" should cover any damage suffered by the building's structure and common public areas, it will not cover damage caused to your personal property by your neighbor's overflowing tub or toilet. These same coverage guidelines apply to liability coverage. A "slip and fall" in the common lobby should be covered by the building's master policy. "But if the injured party was in the building specifically to visit a friend, the friend might also be held liable for damages. And if the accident and injury takes place within the four walls of a specific unit, the unit's owner is definitely exposed, another reason for having your own personal insurance policy," said Colwell. Despite a homeowner's association requirement for proof of insurance at the time of a unit's closing, try monitoring ongoing coverage after the last move-in box has been carted away with the trash. Arthur Schwartz, president of Masters Coverage Corp., said, "Unlike a commercial tenant, which could be in violation of its lease if insurance coverage lapses, NYS-based co-op and condo associations are precluded by state legislation from requiring unit owners to have insurance coverage." This doesn't mean that association boards don't have any recourse to protect themselves. "The board has the absolute right to know about individual unit owner's insurance coverage," said Philip Menna, Esq., a White Plains-based attorney. "Many buildings now require individual unit owners to procure a contents or personal policy as a condition of ownership. On re-sales, it is a requirement in some buildings that the new owner procures a contents policy and name both the building and the management company as additional insureds under the unit owner's policy. This insures multiple layers of insurance coverage for the building in the event there isn't adequate coverage under the building policy." Before shopping for personal insurance coverage, co-op and condo owners should review their association's bylaws to see what is covered or not covered by their association's master policy. An insurance agent, experienced in working with condo and co-op owners, will be able to recommend the right kind and amount of personal property and liability insurance. You'll get the coverage you need to not only protect your belongings and unit but to cover gaps that may exist in the association's master policy. In addition to maintaining coverage, it is as important to review and upgrade coverage as alterations and improvements are made to the co-op or condo. If you put down a new parquet floor or change the kitchen or bathroom cabinetry, this becomes the unit owner's personal property, not the building's. If damage is caused to the original structure through no fault of the unit's owner, typically it will be covered by the building. But if the "original structure" was carpeting and padding over a cement-poured floor, you may be out of luck if a burst water pipe turns your expensive parquet floor into paper maché. Rob Seitz is a commercial real estate agent at Goldschmidt & Associates, Scarsdale, N.Y.