Sometimes, we need a painful experience to prod us into doing what we should have done in the first place.

On Oct. 1, 2007, a serious fire ravished a condominium building in the Adams Morgan section of Washington, D.C. Fortunately, it does not appear that there were any serious injuries, but many condominium owners and renters will now have to relocate until the building — and the damaged units — are restored.

There was property loss, both in the common areas of the building and within those units where the fire occurred. And clearly there will be a lot of smoke and water damage to the personal property of many of the residents.

Let’s talk insurance: In every condominium and cooperative apartment building, there is what is known as the “master insurance policy.” The legal documents governing these associations require that a certain level of insurance coverage be obtained. When you went to buy your unit, your lender insisted on receiving proof that there was a master policy and that the coverage was consistent with the association’s legal requirements.

But contrary to what many owners believe, the master policy may not cover you for all of your personal loss. According to the Insurance Information Institute, the master policy “covers the common areas that owners share with others in the building like the roof, basement, elevator, boiler and walkways for both liability and physical damage.” If, for example, someone trips on the stairs, the master policy will provide coverage, and should that person file suit, the master will also cover the legal costs incurred by the association.

If a unit is destroyed, the master policy will pay for the restoration of the walls and the ceilings. In some cases (depending on the insurance policy) if your appliances are damaged, the policy will reimburse you for the cost of replacement. Keep in mind that every insurance policy contains a deductible, and you should inquire of your association manager what that number is.

But any improvements that you — and even previous owners — made to the unit will not be covered. The insurance term is “betterments”; if you added wallpaper or remodeled your kitchen or bathroom, these upgrades will not be covered by the master.

Many owners do not understand this, and find out only when it is too late. An unfortunate — but typical — situation is where an owner inadvertently lets his or her bathtub overflow, causing water to cascade down into all of the units below. The master policy will cover the cost to repair the ceilings and the floors, but your valuable Oriental rug and expensive plasma television set that were damaged will not be covered.

You need to obtain your own individual insurance policy. In the trade, it is referred to as an “HO-6” policy. This will give you coverage — subject to your own deductible — for the betterments in your unit, and for your personal furniture and clothing.

Depending on your own financial situation, the HO-6 policy can also include such things as reimbursing you for monthly assessments and alternative lodging while you are unable to reside in your unit; water and sewer back-ups (which are all too common especially in older buildings); and even expensive jewelry, stamp or coin collections, or fur coats.

Some associations require that every owner obtain the HO-6 policy, and I have always strongly recommended that every association make this a requirement.

You should be able to obtain this kind of policy through any insurance agent. But in my opinion, the best approach is to obtain that policy from the same carrier that issued the master policy.

Take this very common situation: a common-element pipe burst, causing major flooding damage throughout the building, including in your unit. The condominium association files its claim against the master policy, and you file your claim with your insurance company. However, each company points it finger at the other one, stating that it is the obligation of the other carrier to cover the claim. Often, when faced with this situation, I merely tell both agents: “Guys, both the master and the HO-6 policy were issued by the same company, so why not just work it out on your own, and make sure that both the association and the owner are properly compensated for their losses?”

If you own a condominium unit, you must learn the difference between a unit and the common elements. Your unit consists of the area between the four walls, from the floor to the ceiling. Common elements include, for example, the elevators (unless they go to specific units in which case they are called limited common elements); the roof; and the mechanical equipment that services all of the units in the building.

But it’s not that simple. For example, pipes that serve only your unit will most likely be considered part of your unit — even though those pipes go down the walls outside of your unit.

It is important that you understand these concepts. Your association declaration will provide you with this information, but if you get confused with the legal (and architectural) terms, consult the association’s property manager, its attorney or even the insurance agent for your building. It is absolutely critical for every owner to carefully read — and reread periodically — these legal documents.

If you are renting your unit, you probably will not need protection for your tenant’s personal property. However, you still need coverage in case someone gets hurt in your unit, and accordingly should still obtain the HO-6 policy. And you should make it a requirement in your lease that your tenants purchase “renters insurance” — called an HO-4 policy — so that they too will have protection in case problems arise.

Damage to condominium units can come from many sources. The hot water hoses in your washer can burn out. Your fireplace chimney can get stuffed up, unable to provide the necessary updraft. Or the rubber seal under your toilet gets worn down.

One never knows when these problems occur. More importantly, disasters are often out of your control; they are caused by your upstairs neighbor. I am currently involved in a situation where the upstairs owner accidentally drilled a hole in a sewer-line pipe, causing extensive damage to the unit below.

The cost of this insurance is nominal, considering the risk and the exposure involved. The October fire should be a strong incentive to pick up this protection today.

(For more detailed information, check out the Insurance Information Institute Web site.

Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to


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