Common Interest Communities Insurance Risk
Condominiums and Townhomes Insurance
Minnesotans are increasingly residing in condominiums and townhomes which they own. This relatively new type of home ownership is significantly different from the traditional single family home on a lot. In particular, risks such as fire in a next door neighbor’s dwelling are often greater when what separates the homes is not sixty to 100 feet of space, but only a wall. In addition, there are multiple insurance policies which are involved in the event of fire or other acts or occurrences resulting in damages requiring repair or replacement. Typically, both the Homeowner’s Association and the owner of each unit carry insurance. In such circumstances where there are multiple insurance policies, “Gaps” may arise where neither policy provides sufficient coverage for damages to a homeowner’s unit or the units of adjacent or nearby homeowners or for the “common elements” which are shared by multiple homeowners. In part, such “Gaps” arise because this type of home ownership is more recent than the more traditional single family dwelling.
Because of these concerns, in obtaining both property and liability homeowners insurance policies, the condominium or townhouse homeowner or recent purchaser should consider consulting with a specialist in Risk Management who does not sell insurance policies, but analyzes both the Association’s insurance policies and the prospective policies of the homeowner to be certain appropriate coverage is purchased at a reasonable price that insures against all probable risks without any gaps in coverage. The objective is to be certain the homeowner, after a loss (damage) occurs, will have adequate insurance funds to repair and replace, to the maximum extent possible, the damages the homeowner sustains or is otherwise responsible for. “Risk Management” is an insurance specialist, not necessarily a lawyer, but someone very familiar with the insurance industry and its policies, exclusions, amendments and riders which are available.
Please note, the contents of this website are for information purposes only and do not constitute legal advice and no attorney – client relationship is intended nor exists by the information provided herein. An attorney – Client relationship with Lee Watson only exists following the execution of a written Legal Services Agreement with him, a form of which to review is available on request.
Copyright 2014, Lee Watson.