WHAT IS CONDO MASTER INSURANCE “WALLS IN” COVERAGE?
Over the years, we’ve seen a number of lenders requiring condo unit owners to provide evidence of insurance stating that “walls in” coverage is provided by their insurance policy. It’s a mystery how this term has perpetuated itself through the mortgage, and now insurance, industries. But regardless of its origins, if you own a condo unit, there are a few things you’ll need to know about what is, and isn’t covered, under your Massachusetts Insurance Master Condo Insurance Policy.
First off, “walls in” coverage is not an insurance term, nor is it a term defined anywhere in your insurance policy. Typically, your Massachusetts Condo Master Insurance Policy will be issued using the Insurance Services Office (ISO) forms. The form, known in the insurance world as an HO-6, provides property insurance coverage for whatever the condo unit owner is legally obligated to insure per the Condo Association Bylaws. Coverage A, as described in the HO-6 Personal Condo Insurance Policy form.
All About The Studs: Navigating the Personal Condo Policy:
Condos and Townhouses are the conundrum of the housing world. They are individually owed, so they aren’t apartments, but they are different from free standing homes as well. Condos and townhouses come in all shaped and sizes. Similarly, Condo insurance policies can vary from community to community because they are written around the specific master policy that your association provides. It is important for you to have an insurance professional look over you condo policy, with a copy of the bylaws for the master policy to make sure that there are no holes in your coverage. Here are a couple things they will be looking for.
All about the Studs:
A large part of condo insurance comes down to studs in, vs studs out. A common insurance analogy says if your condo master insurance policy is “studs in” then if you took your condo and turned it upside down everything that stayed attached to the condo would be covered by the master policy. This includes cabinets, flooring, ceilings etc. Everything else would need to be covered in your personal insurance policy. If you have a "studs out" condo master insurance policy, the policy only covers things from the studs in the walls out, so costs for items like flooring, cabinets, ceilings, would all have to be accounted for in your personal policy HO-6 Personal Insurance Condo Policy.
If you have studs in policy, and you make improvements to your condo like new floors or countertops, check with your Condo Master Insurance Policy to make sure they will cover the improvements, otherwise you will need to increase your personal condo policy coverage's to make up the difference.
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