Condo Insurance Guide
Insurance policies for condominiums differ from the typical insurance policy for a single family home, as condo owners face different needs and potential problems. Here’s some of what you need to know when selecting an insurance policy for your condo.
To begin with, condo owners own their unit and share ownership of the rest of the building with the other owners. Typically, the condominium association will insure common areas (and pass the expense on to the condo owners through their condo fees) and the condo owner will be responsible for separately insuring their own unit. The responsibility of the condo association and the homeowner should be spelled out in the condo’s master policy and association rules. As each policy is different, condo buyers will need to find out what they are responsible for insuring in the particular building which you are buying.
Home buyers should understand which type of insurance coverage the condo association provides. Typically, policies cover either “bare walls in” or “all in”. Broadly, the difference between the two is that the “bare walls in” policy doesn’t cover the fixtures in your unit, while “all in” policies also cover the standard fixtures. This is important to know as it will affect the amount of coverage you will need to protect your interests.
Dwelling Coverage
Once you know what will be covered by the condo’s insurance policy, then you can determine what you will need to cover through your own insurance. Your insurance agent may need a copy of the policy to determine if there are any gaps between the insurance policy of your condo association and the insurance policy which you are considering purchasing.
Covering Your Contents
In a single family home, the first consideration when buying insurance is covering the house, and then the coverage for the contents is considered. For condo owners, the primary consideration is usually the contents of the home. In order to determine the amount of coverage you need, you’ll need to look at the value your possessions. Be sure to consider any special items such as jewelry or collectibles.
Liability
Your liability coverage will also be different for a condo policy compared to a typical homeowner’s policy. Your liability insurance will determine the amount the insurance company will pay if you are personally liable for someone else’s injury. Because there is more potential for problems because of the close proximity of your home to other units, you will likely want more protection from personal liability than would be provided in a standard homeowner’s insurance policy.
Other things to consider:
- Do you want the insurance policy to cover replacement cost or cash value?
- Does your policy cover the unit assessment from a loss charged by the association to all owners?
- Does your policy include water back-up of sewers or drains?
- What amount are you willing to pay as a deductible on a claim?
- Do you need special policies such as flood or earthquake insurance?