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Condo Association Takeover of Foreclosed Unit - New Insurance Needed?


Q: If our condominium association obtains title to a unit through foreclosure, does the condo association's master insurance policy cover interior furnishings which are typically required to be insured by the individual unit owner?

A: I doubt it.

Most condominium master insurance policies which I have read only require the insurer to insure those portions of the condominium property which the condominium documents and state statute obligate the association to insure.

Although your condo association should obviously check with its insurance advisors, I suspect the condo association would need to purchase a separate unit owner's condo insurance policy, usually called an HO-6 policy, if it wishes to insure those items in an association-owned unit which are generally the unit owners' insuring responsibility. In general, these include floor, wall, and ceiling coverings, electrical fixtures, appliances, water heaters, water filters, built-in cabinets and countertops, and window treatments, including curtains, drapes, blinds, hardware, and similar window treatment components, or replacements of any of the foregoing.

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