June 2023

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INSURANCE... from page 32.

*Waiver of Subrogation Association documents require the insurance to provide a waiver of subrogation so the master policy cannot go after a unit owner for damages they may have caused. The same does not apply to renters, therefore it is always recommended that renters carry HO4 insurance this way if the renter causes the damage to a unit or building, the master policy has the ability to subrogate against that renters HO4 policy. The new insurance law in New Jersey does not directly address the waiver of subrogation, only the requirements for the owners to carry the insurance. It is highly recommended every unit owner in a communi ty association have their own personal insurance regardless of what type of coverage their association’s master policy provides. It is important to check with your association’s insurance broker as well as your own personal insurance broker to make sure you have the proper coverage that coordinates with your association’s master policy as well as your personal insurance needs. This will help ensure the best outcome for everyone after a loss. n helpful risk management tool as it can help keep these claims off the association’s loss runs.

carry the HO6 policy to cover your personal belongings and liability. The all-in coverage is most used for cooperative ownership buildings. The HO6 will include coverage for property, personal lability, personal belongings, additional living expenses, loss assessment, and personal articles floater. Unit owners should speak with their own insurance brokers to find out what other coverages they may need to properly protect their assets. If you are a residential unit owner or business owner that rents your unit, there is a new requirement in New Jersey that requires owners to carry a $500,000 liability cover age on your HO6 policy. In addition to this, it is recom mended that any units that are rented out by the association (and unit owners) should require renters to carry their own insurance as well, which would be a renter’s policy or HO4 policy. This would cover the renters’ personal belong ings, additional living expenses, and their own personal liability. This is very important to the community. If a renter was to accidentally cause damage to the building, the association’s master policy is allowed to subrogate the claim against the renter. There is a waiver of subrogation* against a unit owner but not against renters. This is a very

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JUNE 2023

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