January 2025
It is only after a fire occurs that a condominium corporation learns just how many owners and tenants have little or no insurance.
Condo boards should stop taking a laissez-faire attitude toward homeowner’s and tenant’s insurance. While there is no law requiring that people have insurance, governing documents should require it. Without this coverage, the corporation and those with insurance pay the cost.
It is not adequate to just require insurance. Without adequate checks and enforcement, insurance requirements are likely to be ignored.
If the governing documents require owners and residents to carry a certain level of homeowner’s insurance, a tracking program should be in place. Each resident should be required to produce a certificate of insurance or a declaration page from the policy specifying coverage limits and the date a policy expires.
Residents without adequate coverage should receive notice, and those whose policy is nearing expiration should receive written notice 30 days prior to their insurance renewal date, and another after the date passes if they are not in compliance. Residents of units failing to get in compliance may be responsible for enforcement costs or other consequences.
Monitoring insurance is a continuous job that can be handled by the management office with or without insurance tracking software. If insurance monitoring is outsourced to a third-party, their costs of enforcement can be charged back to owners failing to be compliant.
