Recent events have deeply underscored the need for Homeowner’s Insurance coverage. Since it’s not an unusual question for us – why do we chase insurance certs as we do – and why is it important to fine Owners as the Board does when adequate proof of coverage is not provided. The answer is common sense.

First, what are the events I’m referring to? Well, in one case an Owner put down thin-set floor leveler and did not provide adequate protection along the perimeter wall. It ended up splattering across two tiers and almost 20 floors of windows on the exterior. And our window cleaning team may not be able to remove it in some locations without damaging the glass. A potentially costly mistake. (Fortunately, the window washers since reported there appears to be no external damage. That could have easily not been the case.)

In a second separate situation, an Owner started installing a washer and dryer without approval. (There will be more about that in another post.) While work was being done within the wall, a sawzall was inserted too far, puncturing a water line. This resulted in water infiltration into 7 units below, another potentially costly mistake.

These types of situations demonstrate why condo owners need to maintain adequate coverage. Unit Owners at Park Tower specifically are required to purchase and maintain liability insurance covering their Unit. Proof of coverage should be provided to the Association upon purchase of a unit and on an annual basis when the policy is renewed.

Our management office tracks the status of General Liability insurance coverage for each unit from purchase to renewal every year. PTCA’s governing documents require a minimum of $500,000 to be carried – and Management recommends you discuss with your individual agent whether more coverage might be worthwhile.

For new Owners, a letter will go out reminding you to provide your certificate, declaration and/or policy, if we do not receive it with your sales documentation. For existing owners, the month of your annual expiration our office will send out a “Friendly Reminder”. If we do not receive proof of renewal, in the following months a “Notice of Violation” is sent, and the Owner can expect a monthly fine until we receive the appropriate documentation. Each month a list of expired policies is provided to the Rules Commission and Board. Fines are passed starting at $100, and that will double each month up to $1000 per month until we receive it.

Sadly, it is not unusual for us to charge this fine to 10 to 20 Unit Owners each month. Very unfortunately, we have Owners who are being charged the maximum $1000 fine, month after month after month. However, in theory, those extra dollars collected will help cushion the blow should an event occur and the Owner is truly unprotected.

Beyond General Liability coverage, it is also strongly recommended that residents, including both Owners and renters, carry property insurance protecting their belongings. To obtain a parking license for the garage, of course the agreement requires that all cars have the appropriate auto insurance. You might also talk to your agent about “Umbrella” coverage, which is typically a very inexpensive catch-all insurance, should something occur that your other policies will not cover 100%.

However, the most important coverage is the Liability insurance. This is for all owners individual and collective protection. It compliments coverage held by the Association covering the building and common elements. It is intended to protect everyone who calls Park Tower home in the event of an incident such as a fire or flood. Coverage is critical should such a major incident occur, particularly since most of us don’t have the excess tens of thousands of dollars lying around to make us whole in the event of a major emergency.

The Association’s Rules state:

“…Unit owners and tenants are responsible for insuring the unit and personal belongings on the property, including storage locker items and automobiles in the garage. Unit owners shall obtain a minimum $500,000 liability insurance coverage for each unit.”

Other Helpful Coverages

On top of liability insurance, as mentioned earlier, residents (including renters) should consider getting property insurance up to the value of all your belongings. For renters, this is literally called ‘Renters Insurance’, and check your lease, because most leases require this. For those with expensive electronics, artwork and/or jewelry, we recommend you discuss this with your insurance agent. Make sure you have adequate coverage to make you whole in the event an incident occurs which could result in damage or loss of any of your belongings which are important to you.

An “Umbrella” policy provides excess coverage above the limits of your liability and property insurance. Despite how far we think $500,000 might stretch, you would be surprised how quickly that could evaporate in the event of a significant incident. Umbrella coverage is typically quite economical for the added protection, and might be worth at least a conversation with your insurance agent.

Providing proof of the base $500,000 of liability insurance to the Association is mandatory. You should receive reminder notices from the office, but we suggest when you are purchasing your insurance or working with your agent to have your policy renewed, you simply advise them that Park Tower Condo Association be named ‘additional insured’ and provided with a certificate automatically. For most companies, this means they will automatically send us a certificate upon purchase and renewal. We also suggest that you contact us to confirm we receive, or to be extra sure, send us a pdf of your certificate. Not only does that confirm your insurance, but it provides you with proof you submitted. Just use our general office e-mail at parktowercondo-mgmt@habitat.com.

Paid for by Unit Owners’ assessments, the Condo Association maintains insurance policies covering, among other things property insurance, general liability, directors and officers, workman’s compensation and fidelity bonds for employees. There is also a large Umbrella Policy, which acts as a catch-all for things the Condo Association is responsible to cover. The intent is to have more than enough reasonable coverage for the replacement cost of Park Tower itself and contents owned by the Association. In terms of the physical structure, this coverage protects all common elements, up to the ‘shell’ of each unit and the primer coat of paint.

If you ever have questions about insurance, we of course recommend the best source of information is your individual agent. However, feel free to contact the office with any questions at any time.