Changing Your Condo Association’s Master Policy
A part of any multi-unit condo is a condo insurance master policy. Overseen by the condo association, this policy provides general liability as well as property coverage in common areas and at the minimum “bare walls” coverage for individual units. This policy is put in place by the condo association after its founding and funded fees of condo owners. But what happens when circumstance requires you to look at changing your condo association’s master policy?
When To Change Your Master Policy
There are multiple situations where your board may move to adjust your master policy insurance. Here are several of the more common events:
- Inflation of Services Cost: A dollar doesn’t go as far as it used to. As time passes services related to these policies (such as roofing or construction) cost more, so too does the coverage needs to be increased.
- Rising Property Values: Property is insured based on its value, if the value of this property increases, its coverage will need to increase as well.
- Additional Units: If additional units are added to the association, either as an addition or new property folded into the association, they will need to be added to the master policy.
- Changing Insurance Providers: Due to a better rate or more comprehensive coverage, you may think about changing policies. Make sure to do it properly to avoid gaps in coverage.
How To Change Your Master Policy
When your association finds itself needing to make changes to the master policy, there are several things to take into account.
Consult Your Condo Insurance Provider
Talk to your insurance agent about the needs of your policy and get a quote on the costs of the changes. This includes situations where a claim results in an increased premium.
Checking Your Reserve Fund
If your changes to the master policy will result in increased premiums, it’s important to check your reserve fund. If your reserve fund starts to shrink with these new costs, you’ll need to increase your monthly condo fees to compensate.
Notify Your Condo Owners
All unit owners should have access to the master policy to know about where their coverage starts and stops. Make sure to make the revised policy available to your condo owners, as well as an announcement concerning any changes made to it.
When it comes to understanding coverage and changing your condo association’s master policy, it’s time to talk to a specialist. At H&K Insurance, our condo insurance specialists can walk you through your existing policy, as well as provide completive quotes for new condo association insurance policies. Contact us today for help with your master policy.
