Minnesota State Real Estate Practice Test

Who is responsible for obtaining insurance for a condominium property?

1. The individual apartment owners

2. The property management company

3. The board of directors or property manager

4. The local government

The correct answer is: The board of directors or property manager

The correct answer is that the board of directors or property manager is responsible for obtaining insurance for a condominium property. In a condominium setting, the governing documents, such as the declaration and bylaws, typically outline the responsibilities of the board of directors regarding the management of the property. One of their key roles is to secure appropriate insurance coverage that protects the common areas and the condominium association itself from various risks, such as property damage or liability claims. This insurance often covers the building structure, shared amenities, and other common property elements, which helps ensure that there are funds available to manage repairs or recover from losses affecting these components. Individual apartment owners may need to secure their own insurance for personal belongings and liability within their unit, but the overarching responsibility for the insurance policy that affects the entire condominium community generally falls on the board or property management. This distinction is crucial in understanding the operational structure of a condominium and the division of responsibilities among owners, the board, and management.