Right Coverage Insurance Can Be


Tricky: Make Sure You Have the Amy Clements


It’s insurance renewal time! How many of us revel in the excitement of reading our insurance policies to make sure we are properly covered? It’s like waiting for that next Trick-or- Treater to ring the doorbell so we can give them candy and dote over their creative costume.


Wait, what? You don’t enjoy reading your insurance policy? Oh, no bother. The Association’s policy should cover you for most of your losses. Right?


Before you light those holiday candles or eagerly wash all of those party platters, let us share a brief primer of what may be covered under the Association policy and what you as a homeowner may need to insure on your own policy.


Typically in the State of Washington (laws can vary from state to state regarding this matter), the Association Master Policy provides coverage for the common elements, limited common elements and the units. It’s further important to note in the State of Washington the Association’s policy is primary coverage and will always pay first (subject to the Association deductible, of course).


Okay, that sounds easy enough. But what do we mean by “the units”?


Ah, so glad you asked! This would include items in the unit which were built per the declarant or developer’s original specifications. Items covered include interior walls, cabinetry, plumbing fixtures, appliances and floor coverings. Improvements, betterments and upgrades made at the expense of the current or previous unit owner are also covered such as upgraded carpeting, cabinets and appliances, wall coverings, built-in bookshelves and other permanently installed fixtures.


Sounds like there is quite a bit covered under the Association Policy. So why do I need my own policy?


For starters, the Association’s governing documents may state the unit owner is responsible for the Association’s policy deductible in certain circumstances. Therefore, you should have coverage for the dwelling and betterments and improvements in an amount at least to cover the Association’s deductible. Most unit owner policies automatically provide some coverage for the unit and betterments and improvements in the unit. Usually the automatic coverage is 10% of the unit owner’s contents or personal property limit. If, for example, the unit owner has a $50,000 contents limit, the policy may provide


28 Community Associations Journal | October 2018


10% or a $5,000 coverage limit for the unit subject to the unit owner’s deductible of, perhaps, $500.


Also, make certain your personal policy sewer and drain backup limit is increased to match the Association’s deductible. Most personal carriers only offer a limit of $1,000, or no coverage at all.


Next is the coverage for your furniture, clothes and household items. You know, like that 60 inch television you bought on a whim for your Super Bowl party last year. Go Hawks?!


And let’s just say that pumpkin pie was left in the oven just a titch too long and creates the summer bonfire you are still longing for. Make certain you have coverage for additional living expenses in the event you have to live temporarily away from home while the fire damage is repaired.


Consider crazy cousin Jerry, as well. He’s a little accident prone and has history of being litigious. Make certain you have our own personal liability coverage to defend you if he slips in the kitchen again while sneaking that leftover turkey.


Finally, it’s possible your Association policy may not have


adequate limits for that freak lawsuit. You should ask your personal lines agent about Loss Assessment Coverage. This can provide coverage for a special assessment made by the association for certain kinds of losses. For example, someone is seriously injured on common property and is awarded a judgment which is higher than the amount of liability coverage provided on the Association’s policy.


And then, there are some things that just may be flat out excluded on the Association’s policy such as wear and tear or deterioration, damage by insect or animals, settling or cracking of foundation, walls, basements or roofs and damage caused by repeated leaking or seeping from appliances or plumbing. This includes leaking from around the shower, bathtub, toilet or sink. (These events are usually classified as maintenance items.)


That being said, many of us agents have seen a personal homeowners policy provide coverage for some of these items not covered under the Association policy. Not all policies are created equal - so call your personal agent and ask.


Well, I believe I hear that doorbell ringing again. Perhaps, it’s the next season of Stranger Things characters holding out their bags for that full sized candy bar you are handing out. Stay safe out there and love your insurance broker.


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