1. Request a copy of the association’s “declaration” document. Make a list of building items not covered by the association’s master policy (e.g., carpets, hardwood floors, tile floors, kitchen cabinets, plumbing and electrical fixtures serving the individual unit, built-in appliances, unit owner improvements.) 
  2. Have your client estimate the replacement cost of all structural items that are his or her responsibility. (The easiest and most accurate way to do this is to write a list of all such items and then have the client estimate the replacement cost of each.) 
  3. Ascertain the current master policy deductible as well as the maximum deductible authorized in the declaration. Choose the higher. 
  4. Add up the totals in Steps 2 and 3. Round up to allow for errors. That total should be the coverage limit for Coverage A. 
  5. Add “special perils” coverage to Coverage A, changing the perils covered from “named perils” to “all risks” unless excluded. This is important for three reasons: Your client is covered for more losses (e.g., water damage to walls and ceiling from roof leaks), your client has improved coverage for losses subject to the master policy deductible, and you broaden the HO-6’s loss assessment coverage to special perils from named perils. 
  6. Add special perils contents coverage (to cover damage to personal property from roof leaks, paint spills, etc.). 
  7. Add sewer backup and sump pump failure coverage. You want to do this for two reasons: first, to cover direct damage to the unit or contents from these two perils; second, to broaden the loss assessment coverage to include assessments for either peril. (loss assessment coverage applies only to assessments for losses from perils covered by the HO-6.) 
  8. Determine the need for flood or earthquake coverage. 
  9. Recommend that your client buy adequate liability coverage (e.g., $500,000) in limits equal to the client’s other personal liability coverages. 
  10. Urge the client to buy an umbrella policy. Be sure it includes coverage for association volunteer activities, including non-profit D&O, in case your client ever serves on the board.

Courtesy of Jack Hungelmann