Posted On: June 4, 2008, 11:35 am CDT

Posted By: Larry

I don't know where you do business, but in Calif, the CC&R's of a condo assn actually become part of the policy. When a loss occurs, an adjuster is going to ask for the CC&R's to validate how extensive into the interior of the structure the company will pay. Many condo assns wanted the ability to reduce their premiums and coverages and allowing only coverage to the unfinished interior walls of the building allows the assn to basically insure the building shell (thereby reducing replacement cost figures). Some assn's cover the interior as it was originally built and sold, leaving upgraded features to be the responsibility of the unit owner, and I have seen CC&R's that pick up the entire building interior regardless of upgrades. In Calif, the assn definition of their building insurance responsibility takes precedence over the policy coverages of a building and the real estate definition of a building (where all permanent fixtures/flooring/upgrades are included).
My policy is that when in doubt and the insured can't provide CC&R's to validiate their insurance responsibility, I provide ample building coverage (incl the Special form HO32 endt). To my surprise, this coverage has even been paid when the assn carries a high deductible, such as $5,000 or $10,000 and a loss to the building has occured that falls below the assn deductible.