When you purchase a condominium, you want to protect that investment in case of adversity — whether a fire, plumbing catastrophe, liability or theft, to name a few. The condo association should maintain insurance on the building, but it will not deliver all the coverage a condo owner needs
An HO-6 condo policy will insure your unit and can provide liability coverage. Condo association insurance typically does not cover all damage to the structure or contents in a member’s condo unit, leaving an insurance gap and making you vulnerable to financial loss. You can close that gap by buying a condo policy.
A condo policy is a contract between you and an insurance carrier. You agree to pay premiums in a timely fashion, and the carrier agrees to provide you with specified coverages. Your insurance coverage is determined by the insurance policy you select. Clauses in it may address:
· Structural damage to the interior of your condo unit — for example, from a fire or plumbing problem — that requires ceiling, wall or floor repair.
· Loss of personal property and valuables, such as computers, jewelry, antiques, art or other items.
· Temporary housing costs incurred after a fire or storm made your condo uninhabitable.
· Liability for accidental injuries or damages to others, such as a pet biting a neighbor; water damage in an adjacent unit because your child overfilled the bathtub; or other damages associated with a lawsuit.
To evaluate your condo insurance needs and purchase the policy that is right for you, be sure you know what master policy coverage your condo association purchased. A “bare walls” policy will provide you, the condo owner, with little to no coverage in your unit while an “all-in” condo master policy may cover some items, such as appliances, electrical wiring or plumbing.
Your Trusted Choice® Independent Insurance Agent can review your condo master policy and help you determine your insurance needs. Your Trusted Choice agent is independent and can provide rate comparisons for policies offered by numerous companies and help you make your policy selection.
If the Condo Association Has Insurance, Why Would a Unit Owner Buy a Condo Policy?
Condo association insurance may not meet all your coverage needs as an owner.
Condo associations oversee management of the common property owned by the condo association’s membership (the condo unit owners), including grounds surrounding the structure(s), any amenities, and structural aspects of the building(s) that must be maintained. The insurance they purchase to protect the association’s interest in this property may or may not include aspects of the interior of a member’s condo unit.
The extent of coverage carried by an association will affect what policy you, as a condo owner, need to buy. Condo insurance may cover damages resulting from theft, fire, or a severe storm, including temporary housing costs if your condo is significantly damaged. Condo insurance provisions also may cover your loss of personal possessions and personal liability and medical coverage in the event someone is injured in your unit. Policy deductibles and payment limits govern when payments kick in and define maximum payments that the insurance may make in such instances.
Additionally, the purchase of HO-6 policies (which are specifically for condos, townhouses and co-ops) often are stipulated by lenders.
How Do I Know How Much Coverage I Need in My Condo Policy?
This is not a one-size-fits-all question. The answer hinges on what it would cost you to replace your belongings or restore your unit in the event of a burglary, a fire, or some other calamity.
You should create an inventory of what you have and identify the value of your furniture, electronics, clothing, and other personal items. (Use photos or video to make the task easier.) Then compare the level of coverage in the policy you are considering with how much it would cost you to replace the items.
In some instances, you many need to purchase additional coverage for jewelry or other high-value items if they exceed the coverage limits (maximum that can be reimbursed) in the policy.
To find appropriate coverage at a competitive price, ask your Trusted Choice agent to assist you.
When Should I Supplement My Condo Insurance Policy with Other Coverage?
You may want to supplement your condo policy under certain circumstances.
For instance, if your valuables would appraise for more than the limits (maximum that can be reimbursed) stated in your condo policy, you should consider beefing up your coverage with a personal property rider. It is a good practice to keep an inventory of your high-value items and get them appraised. Work with your Trusted Choice agent to purchase the policy rider or endorsement that you need to make you financially whole in the event your items are lost, stolen or damaged.