Regulation
The building insurance policy: what it covers
The building insurance policy, known in Italy as polizza globale fabbricati, is the tool a condominium uses to protect the whole building, from common areas to, in some cases, liability toward third parties. It is not universally mandatory by law, though specific condominium bylaws or renovation contracts may require it, but it has become common practice because it shields shared assets and individual owners from unexpected events such as fires, floods or structural damage. This guide explains the typical coverage included in a building policy, how the assembly approves it, how the premium is allocated among owners, how a claim is handled, and what role deductibles play. Software such as AmministraPro helps property managers keep track of deadlines, cost allocation and insurance documentation in an organized way.
Typical coverage in a building insurance policy
A building insurance policy is built as a combination of coverages designed for the building as a whole rather than for individual units. Core coverage typically includes fire, lightning, explosion and blast, events that can compromise the load bearing structure and common areas such as the roof, facades, stairwells and elevator shaft.
Additional optional coverage is often negotiated at signing: weather events (hail, wind, snow), electrical damage, water damage and infiltration, vandalism, and third party claims for damage caused by the building to neighboring properties. A widely requested guarantee is third party liability, which covers damage to people or property resulting from poor maintenance of common areas, for example a falling cornice or a slip on an unmarked landing.
Some policies also include legal expense coverage, useful for supporting the costs of a dispute related to a claim, plus coverage for water damage claims from third parties, very common in buildings with aging plumbing. It is important to read the technical schedule rather than stop at the commercial product name: two policies with the same name can carry very different limits and exclusions.
Assembly approval and required majorities
The decision to take out, renew or amend a building insurance policy is generally treated as ordinary administration when it simply renews an existing contract under the same terms, while the first subscription or a substantial change in coverage is normally handled as a decision requiring the majority of attendees representing at least half the value of the building, under the criteria of Article 1136 of the Italian Civil Code.
The property manager is responsible for collecting multiple comparable quotes, explaining to the assembly the differences in limits, deductibles and exclusions, and proposing the option best suited to the specific building, taking into account its age, systems installed and claims history. The resolution must be recorded clearly in the minutes, stating the insurer, duration, annual premium and main coverage, so it remains a verifiable reference in later years.
Allocating the premium among owners
The premium for the building insurance policy is treated as an expense for the preservation of common areas and is allocated, unless the contractual bylaws state otherwise, based on general ownership shares under Article 1123 of the Italian Civil Code. Where the bylaws provide differentiated tables, for example for assets or services affecting only some owners differently, allocation follows those specific tables.
If the building consists of multiple stairwells or blocks with different risk profiles, some policies allow differentiated limits or deductibles: in these cases the property manager must carefully assess whether to apply a uniform or a distinct allocation, always explaining the reasoning in the assembly minutes to avoid later disputes.
Handling a claim step by step
When a covered event occurs, the property manager must open the claim with the insurer within the timeframe set by the contract, typically a few days from becoming aware of the event, attaching photographic evidence, repair estimates and, if needed, a technical report. It is good practice to keep all communications and documents in a dedicated file, so they can be shown to the assembly and affected owners.
If the damage also affects individually owned units, for example water infiltration that damaged an owner's apartment, the claim must be coordinated between the condominium policy and any private policy the owner holds, avoiding duplicate reimbursement. A good management software, such as AmministraPro, allows tracking the status of each claim, deadlines and attached documents, simplifying reporting to owners at the assembly.
Deductibles and uncovered percentages: how they affect reimbursement
The deductible is the amount the condominium bears for each indemnifiable claim, while the uncovered percentage is the share of the damage not reimbursed by the insurer, often with a minimum and maximum absolute value. Higher deductibles lower the annual premium but expose the condominium to a larger out of pocket cost in case of damage, so the choice should be weighed against the condominium's spending capacity and historical claims frequency.
It is advisable for the property manager to present the assembly with a comparison of different premium and deductible combinations, so owners can knowingly decide the level of risk they are willing to bear directly, instead of automatically choosing the option with the lowest premium.
Frequently asked questions
Is the building insurance policy mandatory by law?
No, there is no general obligation in the Italian Civil Code requiring every condominium to take out a building insurance policy. The obligation can arise from specific provisions in contractual bylaws, from a condominium loan requiring it as a condition, or from contracts for major renovation works that require coverage of the construction site. Absent these constraints, the choice remains common because it protects shared assets from events that would otherwise fall entirely on the owners.
Who decides which insurance company to choose?
The decision belongs to the condominium assembly, which resolves on the property manager's proposal. The manager is responsible for gathering multiple quotes that are comparable in coverage and limits, presenting them clearly with their respective pros and cons, and leaving the final decision to the assembly, approved with the majorities set out in Article 1136 of the Italian Civil Code depending on whether it is ordinary or extraordinary administration.
How is the premium split if one owner has a separate storage unit with a different risk profile?
The general criterion is allocation based on general ownership shares, unless the contractual bylaws provide differentiated tables for specific assets or services. If a storage unit or accessory room has an objectively different risk profile and is treated distinctly in the bylaws, allocation may follow that specific table, but the rule should always be checked case by case against the bylaws currently in force.
What happens if a claim exceeds the policy limit?
The insurer reimburses up to the limit set in the contract for that specific coverage; any amount above the limit remains the condominium's responsibility and is allocated among owners using the same criteria applied to extraordinary maintenance expenses, unless the assembly decides otherwise. This is why it is important for the property manager to periodically verify with the insurer that the limits remain adequate to the building's updated reconstruction value.
Can condominium management software help with the insurance policy?
Yes. Management software such as AmministraPro allows storing the insurance contract and its attachments, tracking renewal deadlines, logging open claims with their supporting documentation, and including the policy data in the financial statement the property manager presents to owners, reducing the risk of missing renewal or claim filing deadlines.
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