Condo Additions and Alterations, also known as Building Improvements are the fixtures from the inside walls in that make the unit livable. They include but are not limited to the Cupboards, Counters, Sinks, Toilets, Flooring and Light Fixtures. Sometimes depending upon the homeowners association’s master insurance policy they may be the upgrades, granite instead of tile, hardwood instead of carpet, etc.
Why are Additions and Alterations important? 20 years ago homeowner association policies would include coverage for these items, but as these buildings aged and claims became more frequent and costly, homeowners association policies, (the master policy), became more and more restrictive. Today, most master policies do not cover flooring, cupboards, counters, toilets, sinks, etc. These items must be covered on the unit owner’s policy as Additions and Alterations.
20 years ago mortgage companies were only concerned with the building coverage of the master policy . Today, mortgage companies not only want evidence of insurance from the homeowners association, but also from the unit owner. Many require Additions and Alterations coverage equal to 20% of the market value of the unit. A unit that cost $400,000.00 would require $80,000.00 of Building Improvements or Additions and Alterations coverage. This can add an additional $400.00 of premium to a unit owners policy. Something that should be considered when shopping for condominiums.
This article(s) represents the views and opinions of Garrett Parkinson and not the Insurance Companies that he represents or illustrates in his articles.