I continue to be amazed by the number of condominium owners who contact me after they have lost everything in a disaster and had no insurance to cover their personal property and the improvements in their unit, such as kitchen cabinets, or to protect them from liability for damages to adjacent units. The “this will never happen to me” mentality can result in financial devastation.
If a fire were to destroy everything, the condo association (“COA”) is not liable, in most instances, to fully restore your unit, especially if the fire is caused by another owner or tenant. In most instances, the COA is only liable to restore the unit to bare floors, walls and ceilings — no fixtures, no cabinets, no floor coverings, not even paint on the walls. This scenario gets even worse if your the unit owner liable for the fire when an appliance or electrical outlet short circuits. You could be on the receiving end of a lawsuit by every other unit owner affected and their insurance companies.
The same problems would occur if there is a water leak, which are very common in condominiums — toilets overflow, air conditioning units leak, and pipes under the sink can fail. In this scenario, not only are you liable for your damages, and your tenant if you rent, but you are also liable for any water leaking into or flooding an adjacent unit.
Get that insurance!