Thinking about getting your condo insured? We’ve got you covered! But knowing more never hurt anyone. In this blog, we will explore the ABCs of condo insurance, and everything you need to know before you choose the insurance that’s right for your needs.
The first thing to understand about condo insurance is that condo dwellers do not own the building or the land. But you knew that, right? The usual practice is for condo or homeowner associations to carry a master policy that will cover the establishment and accidents that may occur outside individual units or in the common areas. The needs of these policies are pretty clearly defined. You can know more about these policies here.
It’s important to understand that your HOA may not cover any damage inside your condo unit, and it will not compensate you for damages or theft inside your condo unit. For this protection, you will need personal condo insurance, which is usually known as an HO-6 policy. What should you be looking for in a good, condo insurance policy? Let’s take a closer look.
Coverage for personal liability
Liability and coverage for injury are two different things. Here, the unit owner has to take some ownership for the mishap. If there is ever a case where a visitor trips and falls, or injures themselves in some way in the vicinity of your home, your condo insurance will have to step in. Your personal condo insurance will take care of the medical expenses of the visitor, as well as liability costs in case your visitor decide to sue. This is an overlooked but important coverage.
Coverage for your guests
Unlike the first point, this kind of coverage simply covers the medical expenses of the guest, and nothing more. This is for cases where the injury is not bad and can be easily dealt with. Such injuries may be due to clumsiness or a lack of awareness, rather than a broken step or a loose tile. Those situations can lead to personal liability. Essentially, if you are at fault for the injury due to lack of maintenance or any such reason, then you may not be held liable. If not, then all you have to cover is the medical expenses of the guest.
Protection of your building property
It’s important to note that condo unit owners are not responsible for repairing public infrastructure, like a roof, after a fire or a natural disaster. This would be covered by the homeowner’s association insurance. Similarly, common areas also typically fall under the jurisdiction of the HOA. When it comes to condo insurance, you may be covered against damages caused by fire and smoke, explosions, wind, hail, theft, vandalism or a burst pipe.
You will most likely have to cover your own costs or find alternative add-ons to your policy for floods, earthquakes, wear and tear, and damage from rodents, birds and insects.
Coverage for your personal property
Did you know that electronics and appliances are usually a part of personal property coverage? From those items to furniture to clothing, if any of these items are stolen or damaged, you can be compensated if you are covered. This cover is usually used to repair or replace the items.
There are different types of property coverage, for eg., actual cash value, which pays you for the value of your damaged things, taking into account the depreciation in value. The second type is replacement cost coverage, which will reimburse you the difference between the actual value of your belongings and what you paid to replace them. Of course, note that these coverages have limits.
These are the basics of insurance in condos and individual units. But that apart, there are other protections offered. You may want to consider these based on your needs.
For example, if your condo is located in an area that is susceptible to flooding or storms, then flood insurance may be a good add-on. It’s interesting to note that flood damage isn’t usually covered in your average condo policy. These policies are often offered through the National Flood Insurance Program.
An umbrella policy can also help those looking for additional protection. This policy goes into effect once you have surpassed the limit of your liability coverage. An umbrella insurance policy will come to your rescue in cases of large liability claims or judgments. It also protects you in the event that you are personally sued.
That’s a great place to start if you’re looking to gather information about all the protection your condo could need. Of course, the best next step would be to get together with an insurance company and define exactly what cover will suit your specific needs. We’re right here!