I own one of 15 free-standing condo cottages on Cape Cod. Our by-laws currently require "all-in" coverage for our condominium Master Insurance. Any additional premium attributable to additions and/or improvements is supposed to be born by the unit owner via reimbursement to the Association (however, no reimbursements have ever been calculated or requested in spite of the fact that many insurable improvements have been made) If a betterment is not reported to the association by the owner and the master insurance is not increased to cover the change, the by-laws say that the owner assumes the risk themselves should there be a claims shortfall.
 
We would like to change our by-laws to adopt a "single-entity" form, where all the owners would uniformly need to insure any additions or improvements made to the cottages since the inception of the condominium. If we amend to adopt "single-entity" and subsequently...... The total insurance for a single unit is reduced from $200,000 to $150,000 because that unit had a second story added after the inception of the condo and the master insurance is reduced appropriately. There is a windstorm that causes damage to the second story and some of the first. The total to repair all the damage comes to $50,000. The owner only has $10,000 personal "Dwelling" Part A under his HO-6 policy. Would a claim made under the master insurance cover the damages to the first AND second floor, so long as the total of the claim does not exceed $150,000? Or would the owner have to come up with any difference to repair the second floor?
 
One of the Trustees feels that limiting the Master Insurance coverage to the original dimensions and grades would result in "bickering" among the adjustors if there was a claim because it could not be determined what was a "betterment" after the fact. We do have the original floor plans, square footages and general grade, but we do not have the specific supply lists, etc. The Master Insurance Policy specifically says additions are covered and goes on to say that if there is more than one source of coverage for a single claim, that the benefits will be pro-rated. Because we are free-standing, there could be major owner-driven changes made to the cottages, both in and out, that could significantly burden the association if the Master Insurance had to cover everything without appropriate reimbursement from the owner who needed the added insurance. Is there a risk to the association that multiple adjustors would "bicker" about who pays what because we don't have the original supply lists from when the cottages were built? Sorry this is so long! Thank you!