Loss assessment rider. This reimburses you for your share of an assessment charged to all unit owners as a result of a covered loss. For instance, if there is a fire in the lobby, all the unit owners are charged the cost of repairing the loss;

What type of insurance do you need for a co-op or condo? Homeowners Insurance is one of the most popular forms of personal insurance on the market. If you have purchased a condo or co-op, the bank will require insurance to protect its investment in your home. You may, however, need more insurance to cover your personal items, liability or fees that may be charged to you regarding shared areas of the building. You will need two separate policies to protect your investment:

Your own insurance policy, which provides coverage for your personal possessions, structural improvements to your apartment and additional living expenses if you are the victim of fire, theft or other disaster listed in your policy. Your building’s “master policy” provided by the co-op corporation or condo association board. This covers the common areas you share with others in your building like the roof, basement, elevator, boiler and walkways for both liability and physical damage.

To adequately insure your apartment, it is important to know what structural parts of your home are covered by the condo/co-op association and what are not. You can do this by reading your association’s bylaws and/or proprietary lease. If you have questions, talk to your coop or condo board, insurance professional or family attorney.

Sometimes the association is responsible for insuring the individual condo or co-op units, as they were originally built, including standard fixtures.
The individual owner, in this case, is only responsible for alterations to the original structure of the apartment, like remodeling the kitchen or bathtub. Sometimes this includes not only improvements you make, but those made by previous owners. In other situations , the condo/co-op association is responsible only for insuring the bare walls, floor and ceiling. The owner must insure kitchen cabinets, built-in appliances, plumbing, wiring, bathroom fixtures etc. Ask your insurance professional about the following additional coverages.

Water back-up. This insures your property for damage by the back-up of sewers or drains. Water back-up may not always be included in a policy. Check to see that it is included.

Umbrella liability. This is an inexpensive way to get more liability protection and broader coverage than is included in a standard condo/co-op policy.

Flood or earthquake. If you live in an area prone to these disasters, you will need to purchase separate flood and earthquake policies. Flood insurance is available through FEMA’s National Flood Insurance Program. Both flood and earthquake insurance can be purchased through your insurance agent.

Floater or endorsement. If you own expensive jewelry, furs or collectibles, you might consider getting additional coverage since there is generally a relatively small limit for theft of jewelry or other valuables in a standard policy.

Additional Living Expense. This endorsement will reimburse the insured for increased living costs when loss of his/her property forces the Unit Owner or Shareholder to maintain a temporary residence elsewhere. (hotel or motel expense, extra cost for restaurant meals, storage of personal property, etc.)

In most cases, you want to insure your dwelling and its contents for their replacement values, which will likely differ from the dwelling’s market value and your personal property’s depreciated cash value. You should also consider getting a policy with automatic inflation adjustments so that the replacement costs keep pace with the general level of price increases.

When purchasing insurance, it is important to find an agent or company that specializes in condominiums or co-ops. Also don’t forget to ask about all available discounts. You can reduce your rates by raising your deductibles and by installing a smoke and fire alarm system that connects to and sends alerts to an outside service. If you insure your unit with the same company that underwrites your building’s insurance policy, you might also be able to qualify for an additional reduction in premiums. Speak to your insurance agent.