Anchorage Daily News

If an earthquake, fire or theft should strike, is your home adequately protected? Unfortunately, only when the worst happens do we truly know. A devastating condominium fire last year caused us to reassess our insurance needs for a condominium unit we own. What we found was that condominium insurance was a lot more complex than we thought.

When you think of home insurance, you envision coverage for the building, its contents and personal liability. However, insuring a condominium has an additional layer of complexity because you are also part of an association of other homeowners who jointly own and are responsible for common areas. So, where does your responsibility begin and end? Where does the homeowners' association responsibility begin and end? Does your coverage complement the association's or do gaps leave you exposed? To tip the odds in your favor, here are a few documents to get and a list of questions to ask.

Look for your homeowners' association governing rules -- bylaws, declarations and covenants -- as well as your association's master insurance policy. These documents should be with the association's resale certificate that you received before closing. If you can't find your copies, call and request them from the homeowners' association manager or one of the association board members. Then check what the association insurance policy covers:

• Does it only cover from the interior paint of your unit out?

• Does it cover interior fixtures such as cabinets, countertops and plumbing fixtures?

• Does it cover just the empty shell, as each unit was originally built, or does coverage extend to include all of your current upgrades?

• If there are multiple buildings, are they insured individually and with blanket coverage?

• Besides covering liability for the board of directors, are there other endorsements for things such as earthquake damage?

• What is the association deductible? Who is responsible if there is damage to your unit, especially if the loss doesn't meet the deductible?

Next, send your insurance carrier the homeowners' association governing rules and insurance information. Ask if your insurance will cover:

• Upgrades since the unit was originally built?

• The cost of restoring your unit, in case of damage or loss, to its current condition and to current code?

• Are the coverage amounts adequate for personal liability, replacement cost, loss assessment and loss of use?

• How long is loss of use provided?

• Should you consider insuring anything else?

When looking for home insurance, think of your options as a menu where everything is a la carte. The goal is to pick up where the homeowners' association coverage leaves off. Each association is different, so check carefully. After that, call your insurance agent every few years or when you have a change -- such as a major purchase or upgrade -- to reassess your coverage.

For a better understanding of some of the terms you will come across, here are a few definitions:

Betterments: Your interior upgrades.

Personal property: What you can take with you, such as appliances and clothes.

Liability policy: Coverage for a guest's accident.

Endorsement: An additional level of coverage above the basics for specific items such as jewelry, furs and firearms.

Loss assessment: Any covered loss incurred by the homeowners' association that exceeds its limit and that could be passed on to the owner.

Finally, check on insurance as soon as you receive the resale certificate, read the homeowners' association governing rules and buy the appropriate policy. The goal is to buy just enough insurance to be covered if something goes wrong. To ensure that your association is adequately covered, participate in the association meetings. Condo living means everyone has some portion of joint ownership and responsibility.

Clair and Barbara Ramsey are local associate brokers specializing in residential real estate. Their column appears every fourth Friday. Their e-mail address is info@ramseyteam.com.

MORTGAGE RATES

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