Condominium and Co-op Insurance – Is there a difference?

Reader Question: Could you please address the relevant differences for co-op owners seeking adequate home insurance coverage? Are they the same as for condominium owners? JH

Reply:   Although the ownership is different between a condo unit and co-op unit owners, the insurance needs are basically the same in a condominium unit as they are for an owner in a cooperative building. The best way to know your responsibilities is to look at the Association Declaration or “Condo Docs” to assess your insurance responsibilities. You may want to look for an insurance agent that specializes in writing condominium and cooperative policies specific to your state. Community association laws can vary from state to state

According to Clifford Treese, a community association specialist who collects data for the Foundation for Community Association Research (FCAR) and for the Community Associations Institute (CAI), “There are not a lot of differences in the basic coverages for a condominium or a cooperative — as a community association.  In terms of unit owners, both will insure with an HO-6.”

Treese added, “The cooperative may have a secured party(ies), i..e lender(s) that need a mortgagee endorsement on the master/blanket insurance policy.  Cooperatives with FHA Mortgage Insurance will have a Regulatory Agreement that will require certain types of insurance.  Also, like in a condominium, the cooperative’s governing documents will need to be examined. The cooperative definitely will need Business Income/Loss of Rents — for monthly charges that cannot be collected because of a covered cause of loss.”