An advantageous option
However, although it is not compulsory to take out insurance, it is a very advantageous option: if there is a fault or other issue in the property of a residents’ or homeowners’ association that causes damage to a third party and the community does not have an insurance policy, each homeowner will have to pay part of the repair costs according to the percentage that is required of them based on their share of the building. This will involve a higher cost than paying the monthly amount that would be required for insurance.
This is the reason why many autonomous communities reward owners’ associations that have insurance and offer public subsidies for building conservation, refurbishment or maintenance. Moreover, in some regions it is compulsory to take out a policy of this type, specifically to cover fire and damage to third parties, as is the case in the autonomous communities of Madrid and Valencia.
Damage caused by a fire, explosion or implosion, as well as by a direct lightning strike, abnormal electrical currents, floods and even vandalism are covered by the insurance company. In the case of civil liability, given that unforeseen events in any property could cause damage to third parties, this insurance covers the payment of indemnities and deposits that the community has to pay.
In addition to these two essential types of cover, it is highly advisable for each community to select the type of insurance that is best suited to their specific needs. The goal is for the residents to have the necessary protection to deal with any situation that may arise in their building and which requires immediate action. Here are some examples of optional cover that a residents’ association could take out:
- Esthetic damage: repair or replacement expenses necessary to restore the appearance of the building that has been damaged.
- Building assistance: the insured community can benefit from a series of special services, such as surveillance and protection of the dwelling, urgent renovation and repair services, pest control, building conservation services, and so on.
- Garden reconstruction: protects the plants and trees of the building against atmospheric phenomena.
- Water damage: this is, without a doubt, one of the most important types of cover and the one that gives rise to the most claims. It includes, for example, the repair of water-related damage in the pipes or conduits of the residents’ association property (for example, clogged downpipes). In their basic cover, companies include water damage caused by communal pipes, but sometimes there is optional cover for water damage caused by private pipes.
- Cars in the garage: generally, the residents’ vehicles parked in the community garage are protected by this cover in the event of fire, lightning or explosion.
- Legal defense: the payment of legal costs and other types of expenses related to involvement in a claims process will be covered by a resident’s association insurance policy.
- Breakage: breakage of glass, sinks, bathroom fixtures, etc.
- Theft: this type of cover allows residents to benefit from certain services such as receiving substitute locks and keys, replacing stolen personal belongings or cash, renewal of documents, and so on.
- Employee accidents: indemnities and medical care are covered in the event of the death or disability of personnel working in the community.
- Treatment and prevention of pests: It is essential that good insurance offers a service to eradicate insect pests such as cockroaches, moths, ants, or rodents such as rats or mice, which are very likely to appear in the nooks and crannies of our communities.