Legendary funny man Benny Goodman once said, “I don’t want to tell you how much insurance I carry with the Prudential, but all I can say is: when I go, they go too!” The comedian hits on all-important issue: how much insurance is too much, and how much is not enough?
While individual residents of associations and community associations in New Jersey are encouraged to carry adequate coverage in case of a severe accident or catastrophe, their boards have a stake in their residents carrying adequate insurance as well.
While some community associations offer all-in coverage in their master policy, the vast majority require unit owners to carry a homeowner's policy as well. According to insurance industry blog www.InsureOurCondo.com, these insurance policies usually cover things like accidental discharge or overflow of water from your plumbing, fire and lightning, explosions, theft, vandalism and malicious mischief, sudden accidental damage from smoke, and so forth.
Unit owners and shareholders need to begin their road to homeowner's insurance by doing a little homework.
“First, homeowners need to go to the bylaws or proprietary lease because those tell the owner what they should buy as far as what they have to cover,” says Alan Schulman, president at Waldor & Schulman, an insurance brokerage in Livingston. “Is it a bare bones policy where they have to cover the sheetrock in? Some times the master policy will cover everything including kitchen cabinets and add-ins, all the homeowners needs to insure is their personal contents. It really depends on the building and they must read their documents.”