Do I need homeowner’s insurance? Where do I purchase homeowner’s insurance?

Typical Association Declaration and By-Laws as well as the Illinois Condominium Property Act obligate homeowners to obtain insurance on the contents of their unit and contents of limited common elements serving their unit. Most insurance companies provide Condominium Unit Owners insurance, typically referred to as an HO-6 policy.

While the Condominium Association is responsible to repair and maintain the common elements, unit owners are typically responsible to repair and maintain appliances, fixtures and plumbing on either side of the drywall that exclusively serve their unit. Examples include: horizontal and vertical pipes that bring water to sinks, showers, bathtubs, toilets, ice makers, water heaters, washing machines, air conditioners, humidifiers etc.. Unit owners are also responsible for leaks coming from overflowing bathtubs, showers, toilets, washing machines, deteriorated caulking around bathtubs, deteriorated toilet gaskets, etc.

Although water damage is the most common type of damage, unit owners are responsible for any damage that may result from a malfunction or accident involving fixtures and equipment within their unit.

Many Condominium dwellers believe that, because their Association buys a master insurance program, that they do not need to buy their own personal insurance. THIS IS NOT TRUE. As a unit owner you need to insure all of your personal property which includes:

1) Interior decoration (finishing paint, wallpaper, paneling, window treatments etc.)
2) Floor coverings (carpet, tile, parquet, hardwood, marble, linoleum, etc.)
3) Household contents (furnishings, clothing, dishes, etc.)
4) Storage locker contents
5) Non-built-in appliances (refrigerators, stoves, washer and dryers, etc.)
6) Personal liability for you and your unit
7) Worker’s Compensation insurance for any domestic help.

When purchasing a unit owner policy it is recommended that you purchase an “All Risk” policy which provides extremely broad coverage. In addition, finding a policy that offers a combined limit for personal property, improvements and betterment’s and decorating items may reduce the chances of your policy exhausting limits.

In addition, If a loss is claimed against the Association’s Master Policy for repairs to limited and common elements the Illinois Condominium Property Act allows the Association to assess the amount of the Association’s deductible to the homeowners causing or benefiting from the repairs. Many Associations have significant deductibles many are in the $5,000 to $10,000 range. Contact your insurance agent to review your policy and ensure adequate coverage are provided.

You are encouraged to obtain your own insurance policy. In the event you do not, the Illinois Condominium Property Act states “ If the unit owner does not purchase or produce evidence of insurance required by the board, the directors may purchase the insurance coverage and charge the premium cost back to the unit owner. In no event is the board liable to any person either with regard to its decision not to purchase the insurance, or with regard to the timing of its purchase of the insurance or amounts or types of coverage obtained. “