Condominium Insurance – Make Sure You’re Fully Covered
Sunday, October 3rd, 2010If you are a condominium owner then you need to be sure that you have the correct type of insurance in place. The condo and renters insurance are similar in that they both provide cover for personal property and liability protection the main difference being that condo owners have to take into consideration any additional coverage they may need for the building dependent on what the condominium associations master policy covers.
What should the association’s policy cover? The master policy can cover the building and its common parts in two different ways depending on the coverage it provides.
The first way is “Bare Walls” This means that the master policy will insure the building only this includes the walls, floors, roof, and elevators anything that is deemed as exterior structure. This means that anything inside your unit is not covered. Your appliances, interior partitions, plumbing, wiring, carpets, bathroom fixtures anything seen as inside your unit will be your responsibility to repair and maintain.
A policy that is “single entity” is one that the association has in place that will insure the main building plus certain features inside your home that could include carpets, cabinets and appliances. This means that you the condo owner will then be responsible for your own personal property plus any additions or any alterations you have made to the original structure. This type of policy leaves everyone knowing exactly what they are responsible for insuring. This is one reason you should always find out what the associations master policy will cover before you buy a condo unit. Who is responsible for things like swimming pools, the sidewalks, garages, plus any other common parts? You can do this in two ways, simply ask the association or find out the declarations and by-laws.
Once you find out what you are actually responsible for you will then be able to work out how much additional coverage you need to purchase for your condo unit. Make sure any policy you take out will cover everything not in the master policy like improvements or alterations you have made. If the master policy is of the “single entity” type then it will cover a certain amount of dollar payment for your carpets but if you have replaced the old with new it will be down to you to insure the difference between what the master policies will pay out and what your new carpets cost you.
When trying to work out how much insurance you need to purchase to cover your possessions and the unit bear these questions in mind:
1. Should your policy cover for earthquake or flooding?
2. Does the policy cover for replacement costs or actual cash value?
3. Are there limits on how much your valuables are covered for and should you upgrade the cover on these?
4. What does the master policy insure against and what are you responsible to insure for?
These are just a few things to keep in mind trust your insurance agent to lead you in your insurance needs. Always review your policy once a year and make sure any new purchases are included.
