Q: We are about to settle on a condominium unit and do not understand what kind of homeowners insurance we will need. We thought that most lenders require some form of fire and hazard insurance as a condition for making their mortgage loans. Can you advise?

A: When you buy a single-family house, you will be required to obtain a hazard insurance policy naming the mortgage lender as a beneficiary in the event of a fire or other hazard. Needless to say, lenders do not want to make loans if they are unable to have their funds returned in the event of a fire that damages or destroys your home.

When you buy a condominium unit, you do not have to purchase an individual policy. The condominium association will have a master hazard insurance policy that covers destruction or loss of all or a portion of the entire building, including your unit.

Generally speaking, at settlement your attorney will obtain an "endorsement" to the master insurance policy, specifically including your unit and your lender in its coverage. Thus, although you need not obtain such a policy, your lender will not make the loan unless given that endorsement at settlement.

You should take an active role in this matter. First, make sure that your title attorney understands the necessity of obtaining this endorsement to the master insurance policy.

Next, find out from the condominium association or the management company the name of the insurance company and agent. Contact that company directly. Inquire as to the scope of coverage for the entire condominium association. If possible, obtain a copy of the master policy so that you will be aware of its terms and conditions, as well as the extent of the insurance coverage.

There is one additional insurance matter that must be considered. Although your building, and the structure (walls) of your unit are covered under the master insurance policy, you do not have insurance coverage for your belongings. Additionally, if someone is injured in your apartment, or if your apartment is vandalized, the master insurance policy probably will not cover those events.

Accordingly, it is strongly recommended that you obtain your own policy to cover events and items within your own unit. This is usually called a condominium unit policy. You should discuss the coverage and cost with the company handling the master policy because it will be able to give you this kind of policy. You also should comparison-shop with other insurance companies.