Special Coverage Requirements for Project Developments

The following special coverage requirements apply to condo and PUD master property insurance policies:

• Inflation Guard Coverage - The coverage is not required if it is not obtainable in the insurance market available to the association;

• Building Ordinance or Law Coverage - The coverage must include:

• Coverage A: loss to the undamaged portion of a building,

• Coverage B: demolition costs, and

• Coverage C: increased costs of construction.

Building Ordinance or Law Coverage may be included in the property coverage form or obtained as an endorsement to the property insurance policy. The coverage is not required if it is not obtainable in the insurance market available to the association; and

• Boiler and Machinery/Equipment Breakdown Coverage - This coverage is required if the project development has central heating or cooling. The coverage amount must equal the lesser of $2 million or the replacement cost value of the building(s) housing the boiler or machinery. This coverage may be included in the property coverage form, obtained as an endorsement to the master property insurance policy, or the HOA may purchase a stand-alone boiler and machinery policy.

Note: Boiler and Machinery/Equipment Breakdown Coverage may also be referred to as Steam Boiler Coverage or Mechanical Breakdown Coverage.