What is “Additions and Alterations”, Coverage A under the Condo Owners Policy

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As distinguished from personal property, “addi­tions and alterations” are those types of property which comprise a permanent attachment to the re­alty, for example: floor coverings, wall coverings, built-in cabinets and appliances, tile, light fixtures, and plumbing fixtures.  This area of loss exposure demands the close attention of the condominium unit owner. Two important questions must be resolved: (1) what property is the responsibility of the unit owner, and (2) what is a proper valuation of such property? Part of the answer to the first question may be found in Section 718,111(11 )(b) of the Florida Statutes which became effective October 1, 1979, and has been since modified by the Florida Legislature almost annually.  Some of the most important changes were made in 2008.

The statute now dictates the insurance responsibilities of the Association…..as opposed to the Condominium Declaration documents.  The statute applies to all residential condos, regardless of the date of the Declaration.  The Master Policy of the Association must provide primary coverage for all portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications.

Any such interior items additionally installed or by the unit owner after acquisition of the unit, or any increase in value created in upgrading the existing interior items, would have to be protected by the unit owner unless responsibility is assumed by the condominium association under its declarations and/or bylaws, and covered by the association insurance. To avoid under or over insurance, the unit owner should clearly identify the property for which there is personal responsibility. If in doubt, the best recommendation would be to increase the amount of coverage the unit owner maintains for additions and alterations.

It is also important to determine whether or not the condominium association carries a high deductible which may preclude the payment of relatively minor damages on interior unit items under the association policy. If so, coverage should be provided by the unit owner.  Note that the board of the association sets the “reasonable” deductibles.  The unit owner should understand the “deductibles” in the Master policies and how they are applied.  High deductibles could yield Loss Assessments to the unit owner.

The following property is typically NOT insured under the Association’s Master Policy and is the responsibility of the condo owner.

Floor coverings, tile, wall and ceiling coverings (paint)                                                                                             Electrical fixtures                                                                                                                                                               Appliances                                                                                                                                                                           Water heater, water filters                                                                                                                                               Built in cabinets                                                                                                                                                                 Window Treatments                                                                                                                                                         Replacement for any of the above

Air conditioning units, regardless of where they are located are the primary insurance responsibility of the Association.

The second question is more difficult to resolve. The unit owner should know the cost of additions and alterations made at personal expense. However, property installed by the builder or a previous owner may have to be evaluated with the help of the association, suppliers, contractors and others. Establishing an amount of insurance deemed adequate for a serious or total loss to the additions and alterations is most important because quality and quantity varies so greatly among unit owners.

Learn more by calling SWFL Insurance Agency at 239-265-9577