Unit owners of Dillon Valley West Condominium Association:
This page is to assist in clarifying the coverages provided by the Dillon Valley West
Condominium Association insurance policy, which continues to be insured with Farmers Insurance effective 4/1/2020 (*see disclaimer). Although there has been no significant change in coverage pertaining to the unit, there is consistently the need to help clarify the extent of the association coverage and what insurance the residential unit owners should purchase personally.
This description applies only to residential unit owners and DOES NOT apply to commercial unit owners.
In the current policy period, the Dillon Valley West Condominium Association policy is written in a format known as “current construction”, or “inclusive” coverage, or sometimes “studs in” coverage – as opposed to “bare walls” coverage. To unofficially clarify this coverage format, it can be said that “if you shook the residential unit or turned it over, property within the unit that does not move is Building Property and is within the scope of the association policy.” This would include interior walls, doors, finished floor coverings, cabinets, fixtures and built-in appliances including unit-owner upgrades to a residential unit*.
Although this coverage format is among the best in the industry, it does not encompass everything or all of your insurable interest within your unit. For example, the current association building deductible is $5,000. It is entirely possible for there to be a claim within your unit in which you would be called upon to make up the $5,000 gap in building coverage. Additionally, there are several other necessary coverages not available on the association policy which you should insure.
As a residential unit owner, you are strongly advised to make up what is not covered in the unit by purchasing your own Condominium Unit Owners Policy (AKA HO6 policy). Please note that these policies are appropriate for townhomes as well. Many unit owners have this coverage at adequate limits already. If you do not already have a Condominium Unit Owners insurance policy, it is strongly suggested that you purchase one. To insure the gap in building coverage, you will need to insure Building Property or Building and Alterations coverage within the perimeter walls of your unit at replacement value of not less than $5,000 (a $10,000 limit is inexpensive and suggested).
In addition to Building and Alterations, most unit owner’s policies will include coverage for your Personal Property within the unit; the Loss of Use or Loss of Rental Income as applicable; Loss Assessment; and Personal Liability. A sample of coverages that should be on your policy follows:
Loss of use (loss of rents)
Replacement Cost limits
$10,000 (not less than)
|Personal Liability||$1,000,000 (not less than)|
Under certain conditions and/or subject to non-discriminatory standards described within Colorado Statutes, it is entirely possible for a unit owner to be assessed the condominium deductible. Unlike Farmers, not all insurance companies will respond to such a claim. It is highly advised that you consult with your agent or examine your unit owner’s policy to confirm the coverage for the assessment of an association deductible.
If you own a rental unit, it is also advised to verify that the peril of theft is covered under your current policy. It is not uncommon for insurance companies to exclude the theft of personal property within your rented unit. Again, consult your agent or policy regarding this potential gap in coverage.
The board of your association is not directing you to purchase your policy from any particular insurance company or agency. In fact, these types of policies are common in the industry and typically inexpensive to purchase – generally less than $400 per year and often far less. If you now have a policy, call your current agency and have them modify your coverage to limits not less than those shown above. If you do not have a policy, our agency will be more than happy to assist in placing your coverage. Please contact Kinser Insurance Agency at 970-879-1330. Also see kinserinsurance.com for more details.
This letter is not meant to preclude the professional responsibility of your current insurance agent to design and suggest coverages which fulfill your specific needs. Depending on the underwriting requirements of your insurance company, there quite possibly could be reasons for more or different coverages than those shown above.
Failure to heed this warning could be expensive. Please contact your agent immediately.
Kinser Insurance Agency
*Disclaimer: This document is meant to be a general description of coverages for use as a guideline in the purchase of personal individual unit owner’s policies only. All association coverages are subject to specific policy language, exclusions and limitations of policy number 604387439 issued by MidCentury Ins. All claims, both future and past, will be adjusted and evaluated by use of the specific causes of loss peculiar to the event in question with insurance proceeds subject to the specific applicable policy language in force at the time of the loss.