The Association carries an insurance policy providing coverage for damage to the building and for liability to third parties subject to a $10,000 deductible. This policy does not provide coverage for owner’s injuries or loss of owner’s personal property. Under the present climate of insurance underwriting, it is unprofitable for the Association to make small claims since the resulting increase in future premiums will more than offset any claims paid. Accordingly, the Association policy has a deductible of $10,000.
Owner’s are personally responsible for losses up to the amount of the deductible for any damage in their unit. Owners are required to obtain insurance on their unit providing for type 6 (Condo owners coverage up to the amount of the $10,000 deductible. This policy will also provide coverage for loss of personal property, including theft loss and liability for negligence although there will be a small deductible with this policy. Owners are required to provide notice to the Association of their coverage. A “bare bones” policy which covers personal property up to $20,000 and $10,000 of type 6 will cost approximately $200. per year although additional coverage for sewer back-up is recommended since the building insurance for this type of claim is limited.
The Association also carries earthquake insurance subject to approximately $140,000. deductible based on 2% of replacement cost and flood insurance with $50,000 deductible