Michigan Condo Insurance: What You Need To Know

Michigan Condo Insurance

When purchasing or owning a condominium in Michigan, it is important to purchase adequate coverage beyond the association’s policy to protect your investment and assets.

The condo association’s policy protects only what the association as an entity ‘owns’. It does not extend to your personal liability, owned belongings, interior structures, or improvements. Your individual condo insurance, often known as an HO-6 policy, provides this important protection. 

How do you know what to insure when it comes to the interior of your unit? All condo real estate transactions include a Sellers Booklet that you as the purchaser will receive. This booklet contains the bylaws stipulating the legal responsibilities of both the Association and the individual condominium owner. 

A couple of coverages that are unique to condominiums are loss assessment and improvements and betterments. Loss assessment is an amount the association could make all unit owners responsible to pay when the association’s master insurance policy isn’t enough to cover the loss. This usually occurs when there is a considerable injury or accident on property for which the association is sued.

Improvements and betterments are things that you decide to change within your unit that perhaps the association’s policy covers. Again, the bylaws and master deed should always be consulted when making insurance decisions. If you purchased a unit with an unfinished basement and you choose to finish it, your insurance would need to be responsible for replacing or repairing those finishings when a loss occurs.