Becoming a condominium is a birthday: deed of foundation, organisational and operational rules (SZMSZ), first general meeting, a new communal existence. The to-do list is long and insurance typically ends up at the bottom of it – yet the weeks of transition are exactly the riskiest: the old framework no longer applies, the new one not yet, and if damage strikes just then, disorder is expensive. This article is the insurance timetable for a building that is being formed.
- The basic principle: the building must not be left without cover on a single day of the process – planning insurance for the transition is part of the formation checklist.
- The deed of foundation is also the basis of the insurance: the freshly drawn line between common and private property decides what the building's policy will cover.
- Insurance is a natural agenda item for the first general meeting: this is where the first conscious decision, based on competing quotes, can be made.
The transition: who insures the building while it is being formed?
The starting point varies – a family house divided into flats, a new building taken over from a developer, a community converting from a cooperative – but the question is always the same: what covers the building during the transition? If a policy is in force (the former owner's, the developer's, the cooperative's), it has to be clarified how long it runs and what it covers, and from when the condominium needs its own. Good practice is to plan an overlap: the new contract should start so that it is already in force when the old one ends – with no gap in cover. This is a matter of timing, which is exactly why it is worth writing into the formation timetable in advance.
The deed of foundation: the map for insurance
The big legal task of formation – drafting the deed of foundation and the house rules – is also the groundwork for insurance: this is where it is decided what becomes common and what private property, and who will decide on the building's affairs and how. Two insurance considerations are worth keeping in mind while the text is being drafted: clarity about the common–private boundaries (vague wording is a source of claim disputes for decades – here is why), and a practical set of decision-making and authorisation rules (the SZMSZ and insurance). The legal work belongs to the lawyer; the insurance checklist is mine – together the two make a good document.
The first insurance decision
The first general meeting (or one of the first meetings after formation) is the natural place for insurance: this is where “we are somehow insured” can turn into a conscious decision. The process is the same as in any building – a data list, getting competing quotes, a comparison table, a resolution – but a newly formed building has one advantage: no inherited bad habits. The sum insured can be sized properly from the start (sizing), the archive begins clean, and the renewal-date routine can be a habit from day one.
The first year after formation
The first year of a new condominium is for fine-tuning: you find out what the building can do (the first smaller claims, the first questions at a general meeting), and the insurance adjusts to that – the first renewal date, the first review, perhaps an adjustment of cover. One piece of advice for a new building: do not let the first renewal date pass in “automatic renewal” mode – looking at the policy with a year's experience behind you is exactly the habit that, in the long run, is the secret of well-insured buildings (the renewal-date routine).
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