ADJUSTERSINTERNATIONAL.COM 5 Landlord Property Coverage Under landlord-tenant arrangements damage to building property is usually insured under standardized commercial property (CP) policies. CP coverage for building property generally extends to designated structures, their internal and external fixtures, their machinery and equipment (such as HVAC units) and personal property used to maintain the structure and premises. Regarding personal property, property owners and claim adjusters need to be mindful of three categories of CP coverage, each under a different limit of insurance. The first category, mentioned above, is personal property used to maintain the structure and premises, such as fire-fighting equipment, but also including floor coverings, outdoor furniture and some appliances owned by the insured. This property is covered under the same limit of insurance as the structure itself, so any loss recovery paid for this type of property would deplete the amount available for repairing or replacing structural damage. In addition, a typical CP policy provides a separate limit for business personal property of the insured, without qualification for its purpose. This limit might overlap with the building property coverage to cover fixtures, machinery and equipment at the insured location. It would be essential for the owner of an apartment building that operated another business on site, such as a dry cleaner or retail store. Dwelling property coverage typically applies to fixtures, alterations, improvements and appliances within the dwelling unit. Building property coverage typically applies to structural elements, including load-bearing walls, plus machinery, equipment and external building fixtures. Building property coverage typically extends to fixtures, alterations, improvements and appliances within dwelling units if the association is required to insure them under the master agreement. Special perils is the coverage normally chosen, with named perils being an option; both are subject to the requirements of lenders or the condo master agreement. Settlement of losses is on actual-cash-value basis unless replacement-cost settlement is selected or required under the condo master agreement. A condo association insurer typically waives its right to recover (subrogate) against a unitowner. Ownership Provisions in Condo Master Agreement Association owns or is required to insure permanent features in dwelling units Resident owns permanent features in a dwelling unit Perils insured against Loss settlement Other provisions Here also, special perils is normally chosen, with named perils being an option; both are subject to the approval of other stakeholders. Loss settlement typically provided on a replacement-cost basis. No separate coverage for other structures, such as a garage. Coverage for a unit-owner’s shed at the insured location comes under the dwelling coverage limit. Allocation of Property Insurance Coverage Under Condo Association and Unit-Owners Policies Standard Condo Association Commercial Property (CP) Policies Standard Policies for Individual Unit-Owners Association policies provide primary coverage before unit-owners policies and would pay for damage to permanent features within dwelling units up to the CP limit. If the CP limit is insufficient for full recovery, coverage could be triggered under a unit-owners policy.
RkJQdWJsaXNoZXIy NjIxNjMz