Condominiums and what your Master Insurance policy covers

Condominiums and what your Master Insurance policy covers

Any Condominium created in New Hampshire after September 10, 1977 is governed under New Hampshire RSA 356-B, the Condominium Act. In the event of a conflict between the Declaration and By-Laws of your Condominium, the provisions of RSA 356-B shall control. This is why you will see the words, as the same may be amended from time to time, in condominium documents and/or your deed. If a new law is enacted under the statue your condominium is automatically governed by it.

To create a condominium is a lengthy process and it starts by completing an Application with the Office of the Attorney General. There will need to be a Declaration and By-Laws created. These are sometimes referred to as the condominium instruments and the law specifies many of the items that must be included in them. Generally speaking, the Declaration is the document that creates the condominium and the By-Laws spell out the day to day operation of the Association

One item that many owners become confused about pertains to the Master Policy of Insurance and what it covers. Pursuant to RSA 356-B:43, the unit owners association or the board of directors is required to obtain a policy that provides fire and extended coverage in an amount equal to the full replacement value of 100% of the structures within the condominium. This means that you do not purchase the insurance to cover the interior of your unit, the association does. You pay for this coverage as part of your dues. You would, however, need to purchase a separate policy to cover the personal belongings inside your unit. This is not a new law or requirement, it has been in effect since RSA 356-B was created in 1977.

The reason for this law and the requirement for the association to keep the property fully insured is to protect the unit owners. What if unit owners were allowed to purchase their own individual coverage and their were a fire or loss in one unit and it turned out that individual owner had no insurance. There would be no funds available to restore the unit and this would be a detriment to all adjacent owners.

Check back often for more information about condominium ownership in New Hampshire.

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