Other Than Life (OTL) Practice Exam

What provides additional protection for a condominium unit owner?

1. Commercial property insurance

2. Homeowner's policy

3. Condominium unit owner's additional protection insurance

4. Public liability insurance

The correct answer is: Condominium unit owner's additional protection insurance

Condominium unit owner's additional protection insurance is specifically designed to cater to the unique needs of individuals who own units within a condominium. This form of insurance typically covers personal property, liability, and the interior of the unit itself, which may not be fully covered by the condominium association's master policy. As a unit owner, one may not be responsible for insuring common areas or the structure of the building but is accountable for insuring their personal belongings and improvements made within the unit. Moreover, this insurance can fill gaps that other types of policies may not address, providing a comprehensive layer of protection for unit owners against potential risks, such as theft, fire, or water damage. This added coverage is crucial for maintaining financial security in scenarios where the condo association's insurance falls short, ensuring that unit owners can recover effectively from losses and damages. In contrast, commercial property insurance is tailored for business-related properties, while a homeowner's policy usually pertains to single-family residences rather than individual condominium units. Public liability insurance primarily protects against claims resulting from injuries or damage to third parties and does not directly address the specific risks faced by condominium owners.