M.H. from Fairfield County, Connecticut writes:
Dear Mister Condo,
I live in a condo in Connecticut. 7 units – 3 in one building, 4 in the other. Is it mandatory in Connecticut to have “all in” complex insurance?
Mister Condo replies:
M.H., it is my understanding that all condominiums of 12 units or more in Connecticut have to have all-inclusive or “all in” insurance. Here is a synopsis found online at https://www.cga.ct.gov/2010/rpt/2010-R-0378.htm:
The act also requires that the insurance on such units include coverage for improvements unit owners installed, unless the declaration limits the association’s authority to do so or the executive board decides, after giving notice and an opportunity for unit owners to comment, not to insure them. For common interest communities containing more than 12 units, the act requires that, unless the association insures all improvements and betterments, it must:
1. prepare and maintain a schedule of the standard fixtures, improvements, and betterments in the units, including any standard wall, floor, and ceiling coverings covered by the association’s insurance policy;
2. provide the schedule at least annually to the unit owners to enable them to coordinate their homeowners insurance coverage with the association’s insurance policy; and
3. include the schedule in the resale certificate required by law.
However, it is fairly common for all Connecticut condominium associations to purchase all-inclusive insurance for the protection of the association as well as the unit owners who have made improvements. There have been arguments for and against this type of insurance as it is more expensive than the previously required insurance pre-CIOA (Common Interest Ownership Act). To avoid “all in” insurance, an association would have to have an inventory of all of the standard items in each unit of the association before any owner improvements were made. This is burdensome for the association and impossible for some associations that just don’t have easy access to those records. While “all in” insurance may be more expensive, if all or some of the units within an association were improved, the association’s “all in” coverage may allow individual unit owners to purchase less expensive insurance on their own as the improvements made to their homes would be covered by the association’s “all in” insurance. In theory, it’s a wash. While your 7-unit condominium may not technically be required to have “all in” insurance, I would think it prudent for the association to strongly consider the cost difference between standard insurance and “all in” insurance and make the best decision for the association and unit owners. All the best!