What is covered in an association policy and what should individual unit owners include in their own policies?

Building policies obtained by associations typically provide coverage for all commonly owned property amongst the units. It is important to understand individual unit owners need to purchase personal insurance to cover several risks not included in the association plan.

Building policies typically include:

• Perimeter and partition walls and ceilings (through drywall, plaster and primer)
• Doors through primer
• Floors through concrete
• Original cabinets and countertops
• Original built-in appliances (those that are permanently attached and cannot operate free-standing)
• Original plumbing and electrical fixtures, heat and air conditioning units

It is also important to note that most association liability coverage extends to common areas only – no liability coverage is provided within individual units. Typically the association liability policy includes workers’ compensation and employer’s liability as it applies to association employees only.

Most buildings require unit owners to purchase policies to cover personal property and personal liability, however some buildings may differ. Unit owners are encouraged to refer to declarations and by-laws for additional information.

Individual unit owners should consider the following when purchasing coverage for their unit.

• Household contents (furnishings, clothing, etc.)
• Storage area contents
• Appliances that are not built-in such as refrigerators, dishwashers, stoves, etc.

• For your unit and elsewhere
• For domestic help, under the workers' compensation section

• Decorating (finishing paint, paneling, mirrors, window treatments, etc.)
• Floor coverings
• Updated cabinets and countertops
• Upgraded appliances
• Updated plumbing

Many declarations state that the property mentioned above is considered the responsibility of the unit owner, regardless of where the problem originated. The most effective method of recourse in this situation is to file a claim with your personal insurance carrier.

A.M. Best is an organization that rates the financial strength of insurance companies. Its mission is "to perform a constructive and objective role in serving the insurance marketplace as a source of reliable information and ratings dedicated to encouraging a financially sound industry through the prevention and detection of insurer solvency."

There are two types of ratings issued by A.M. Best:

• Best's Financial Strength Ratings – provide an opinion of an insurer's financial strength and ability to meet ongoing obligations to policyholders.
• Best's Debt Ratings – provide an opinion for the credit marketplace as to the issuer's ability to meet its financial obligations to security holders when due.