Co-ops are a form of common ownership of a building. In a co-op, you technically buy stock in a cooperative corporation. Your stock represents a share of ownership that is equal to the share of the building that your unit represents. Co-op boards typically provide services for the building such as paying to light the hallways, have a maintenance person on staff, and paying for a building insurance policy. However, just because your co-op has coverage doesn't mean that you don't also need coverage. A co-op insurance policy is similar to a policy for a renter or condo owner in that it covers your property, your liability and your unit, but not the surrounding building.
Co-Op Provided Insurance
Before buying a co-op policy, research what your building's policy covers. You don't need a policy that duplicates coverage that you're already getting through your co-op board. For instance, the amount of coverage you have in the event of a catastrophic event like a building-wide fire can vary between buildings. You only need coverage for the costs that you'll have to bear. On the other hand, your board may require you to carry certain amounts of insurance such as liability coverage.
Since many co-op policies stop at the walls of your unit, you will need property insurance that covers your walls, floors, ceilings and fixtures. This will pay to rebuild your unit in the event of a fire or structural issue. Since this coverage is less comprehensive than what a traditional homeowners policy would cover, it should also be less expensive than a policy on a comparable home that is 100 percent insured by the owner.
Personal Property Insurance
Your property is your responsibility to insure in most co-ops. Personal property coverage doesn't just pay off when a fire occurs, though. It can also protect you against theft and may even pay to replace items that you lose when they aren't in your co-op. When you buy your insurance, look to see if your building covers the items in your storage space, if you have one. If it doesn't, you may also want to include your storage space in your personal property coverage.
Liability coverage helps to pay the cost of reimbursing anyone you harm, either intentionally or unintentionally. If someone slips and falls in your unit, your liability coverage will pay for any injuries that the person sustains. It can also pay the cost of repairing a neighbor's unit if something you do in your unit damages it -- such as having a kitchen fire that causes smoke damage.
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