Best deal on insurance that won't leave you stranded.

It is statistically unlikely that the condominium project you sell or manage--or where you own a unit--will be struck by an aircraft like the one Cory Lidle piloted into an Upper East Side high-rise recently, or suffer some similar fate.

But as this tragedy illustrates, disasters do occur. And if it's your building or unit that is damaged or destroyed, you'll wish you had focused on your insurance coverage beforehand.

Most building insurance is written in language that obscures what is covered, what is excluded and what the notice provisions are. Because reading and deciphering such policies is an admittedly tedious, burdensome task--and again, the likelihood of making a major claim still relatively small--many condo boards, agents and unit owners do not pay enough attention to the details or to a process that can ensure that at the very least they understand the coverage.

In fact, many buildings simply accept the coverage that the managing agent obtains as part of a bulk package for all its buildings. They rarely read the coverage at all, let alone devote the time and energy necessary to understand what the real limitations are. The insurance companies don't do their homework, either, and if they don't review the condominium documents, then the condominium's responsibility and the insurance coverage may not mesh well.

As an attorney who represents condominiums--sponsors, lenders and boards--I advise my clients to insist that their brokers and, preferably, a knowledgeable representative of the carrier, meet with the board and agent at least annually to review the policy and discuss whether better insurance products exist. Many condo policies will leave their policyholders in some pain if they suffer a property loss similar to those on East 72nd Street.

The basics may well be covered, but only to the extent that they will return the building to a reasonable standard, and quite likely not to its pre-incident condition. For unit owners, expensive furnishings, art, antiques, carpets and similar amenities, as well as modifications they made to their units, may not be covered. They'll get four walls and a ceiling, but perhaps not much more. For this reason, unit owners ought to obtain condominium insurance on their individual units. It is important to note, however, that this insurance could be inadequate or useless if the coverage is not coordinated with the building's policy.

Understanding your coverage and shopping for the best available sounds simple enough, and it is. But alarmingly few condo owners and boards take the time to do so. Even relatively low-end condos in New York City are worth a king's ransom and are worth insuring properly.

A savvy broker who knows the condo insurance market will know about the best products available--the ones with the fewest exclusions, simplest notification provisions and most reasonable premiums--as well as the carriers that tend to look most reasonably at claims made. Insist on that periodic review, and insist further that your carrier explain the current policy and justify keeping your business.

The final point to consider is how the proceeds of a claim against the building insurance are spent. In some cases, it goes to the board. More often, it is supposed to go to an insurance trustee if it is a large amount of money. It can be difficult to find a fiduciary willing to be an insurance trustee, so there may be an issue as to where it goes, and who decides how it is allocated. I generally advise my condo clients to answer this question in theory before a claim is made and paid.

That decision, made in the calm of the day when there is no claim pending, is often a better-quality decision than one made in times of tumult, which tends to be the prevailing climate when disaster strikes and a claim is made.

Chances are, you'll never make a major claim on your condo policy. But don't ignore it because that's what property insurance is all about: safeguarding against unlikely but catastrophic events.

BY DOUGLAS P. HELLER, ESQ.

PARTNER, HERRICK, FEINSTEIN