How Much is Enough Getting Adequate Homeowners Coverage

 Legendary funny man Benny Goodman once said, “I don’t want to tell you how much insurance I carry with the Prudential, but all I can  say is: when I go, they go, too!” The comedian hits on all-important issue: how much insurance is too much, and  how much is not enough?  

 While individual residents of a multifamily association in Chicagoland are  required by their lenders to carry adequate coverage in case of a severe  accident or catastrophe, condominium and homeowner association boards have a  stake in their residents carrying adequate insurance as well.  

 Cover Yourself

 If an owner is unable to pay for either their own or other liabilities due to an  insurance lapse, they probably can't pay their monthly fees, assessments or  mortgage either. Any one of these delinquencies will negatively impact the  community as a whole—so it’s in the boards’ best interest to ensure all residents are adequately covered.  

 “Many condominium and cooperative owners do not cover their personal liability or  damage to furnishings and decorating in their apartment,” says Mark Pearlstein, an attorney and partner with Levenfeld Pearlstein, LLC in  Chicago. “Too many condo owners fail to purchase HO-6 coverage or insurance for their  personal property.” While some associations offer all-in coverage in their master policy, most of  the time as Pearlstein notes, HO-6 coverage or “dwelling coverage” is required.  

 According to insurance industry website,, these insurance  policies usually cover things like frozen/burst plumbing, accidental discharge  or overflow of water from pipes, fire and lightning damage, explosions, theft,  vandalism and malicious mischief, damage from smoke, heavy snow, ice and sleet,  among others. Generally speaking, 1,000 square feet works out to around $40,000  in personal property insurance.  


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