Arizona condo and townhome insurance
The Arizona Condominium Act requires your association to insure the building. It does not tell you where that coverage stops, which is the only question your own policy depends on.
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Three things to settle before you buy an Arizona condo policy
- 1
Bare walls and all-in are different purchases
A bare-walls master policy stops at unfinished structure and leaves cabinets, flooring, fixtures and built-ins to you. An all-in policy reaches original finishes but not your upgrades. Your dwelling limit has to be set against whichever line the master policy draws, which means reading the declaration page rather than the summary the management company hands out.
- 2
The master deductible can be charged to your unit
Governing documents commonly let an association charge its deductible to the unit where a loss began, and Phoenix, Scottsdale and Tucson associations frequently carry deductibles in the five-figure range. A failed supply line or a water heater in your unit then produces a bill addressed to you. Loss assessment coverage on your own policy answers it, and the default limit is usually too small.
- 3
A lot of Arizona townhomes are not condos at all
Much of what gets called a townhome here is fee-simple — you own the structure and the ground under it, with a planned community association that maintains the common areas and insures nothing of yours. That is a homeowners policy, not a condo policy, even in a row of eight identical units. Buying the wrong form leaves the walls uninsured. Read the recorded declaration first.
Water heaters in a hot garage, and the claim that follows
Water heaters in Arizona garages and closets fail earlier than the label suggests, and a failed tank or supply line in a stacked building reaches two or three units. Replace a heater past ten years, swap rubber washer hoses for braided ones, and know where the unit shutoff is. If there is a stacked washer-dryer in a closet without a drain pan, mention it when you call.
Roofs, assessments and the association that deferred the work
Monsoon wind and hail put association roofs into the budget, and a thin reserve turns that into a special assessment. Loss assessment coverage generally responds to assessments arising from a covered loss rather than to deferred maintenance, which is why the reserve study date is worth asking for alongside the insurance documents. Ask whether the master policy pays roofs at replacement cost or actual cash value.
Winter visitors and the unit that sits empty
A unit occupied three months a year is a different risk from one lived in year-round. Water that starts in July is not discovered until November, and some policies restrict coverage on a dwelling left vacant beyond a stated period. Say how many months the unit is actually occupied, and ask about a water shutoff or a leak sensor — several carriers credit them.
Documents to have in hand
The association should provide all of these on request. The master policy declaration page is the one that matters.
- The declaration page of the association master policy, not the summary
- The master policy deductible, and whether the documents allow charging it to a unit
- Whether the master policy is bare walls or all-in
- Whether the master policy pays roofs at replacement cost or actual cash value
- The recorded declaration, to confirm whether you own the structure or only the interior
- The reserve study date and any special assessment voted in or pending
- How many months a year the unit is occupied, and the age of your water heater
Frequently asked questions
What does an HO-6 condo policy cover?
Your belongings, your liability, your interior finishes and improvements to the extent the master policy does not reach them, loss of use if the unit becomes uninhabitable, and loss assessment from the association.
Do I need a condo policy or a homeowners policy for my townhome?
Ownership decides it, not the architecture. If you own the structure and the land, that is a homeowners policy. If the association owns the building and you own the interior, that is a condo policy.
I am only here in the winter. Does that matter?
Yes. Some policies restrict coverage on a dwelling left vacant past a stated period, and a slow leak in an empty unit does far more damage than the same leak in an occupied one. Say how the unit is actually used.
How much loss assessment coverage should I carry?
Enough to meet the master deductible your documents could charge you — a figure printed on the master declaration page, and usually larger than the default limit on a condo policy.
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