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What kinds of damage are covered by apartment insurance, and what are covered by building insurance?

Your individual policy should cover damage from issues like leaky pipes. 

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Question:

What kinds of damage is my apartment insurance supposed to cover, and what will my building’s insurance cover? What’s the process for figuring out who pays?

Answer:

Broadly speaking, your own apartment insurance will cover damage that occurs within your four walls, while your building's policy covers anything that happens outside of them, according to our experts.

"If you are an owner, you cover the internal structure of your apartment, as well as contents," says Jeffrey Schneider, president of Gotham Brokerage (a Brick sponsor). "Your individual policy will generally cover fire, theft, smoke, vandalism, water damage from broken pipes and overflows of toilets, sinks, and dishwashers." 

Most claims are for water damage, Schneider adds, but be aware that your individual policy is unlikely to cover breakage of the contents of your apartment. If you own expensive items—say, a crystal vase or pricey jewelry—you may want to get those covered by a separate policy. Ordinary "wear and tear" of your home is not covered by apartment insurance, either, nor are pest infestation issues. 

Your building's policy, on the other hand, should cover everything that is outside your own four walls. And as for determining who pays in the event of damage, Schneider says, "Your proprietary lease or agreement with the building will determine whether your policy or the master building policy or both will cover a claim."

In the event of damage, co-op shareholders should consult their building's proprietary lease, as it will include language about who is responsible for covering repairs. Both co-op and condo owners who take out mortgages are typically required to take out an insurance policy, according to Investopedia.

Renters, meanwhile, have no such requirement, though it is highly recommended in order to protect you in the event of damage to your own property, and that of your neighbors.  

"Apartment insurance will cover the tenant's personal property and any fixtures they have purchased. It should also include liability coverage, so that the tenant is covered in the event of an incident," says Michael Rothschild of A.J. Clarke Real Estate. "As far as financial responsibility, this would be for the insurance companies to determine among themselves."


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