Condo Insurance Policy Basics
Condo insurance is a specialized form of property and casualty cover that is designed to cover the risks associated with owning a condominium. As opposed to a residential home or a townhouse, condo owners are only responsible for covering a portion of the home and the condo association will have a blanket or master policy to cover the remainder of the property that is commonly owned. If you are shopping for or currently own a condo, understanding how a how a condo insurance policy works and what types of coverage are offered is important. Read on, and understand why condo owners are encouraged to buy this specialized form of property insurance.
Coverage For Risks Excluded From a Master Policy
When you finance a condominium, you own your unit but not the entire complex. Because several different units within the complex are connected, insuring the complex as a whole is done under a master policy in which the premiums are paid through homeowners association dues. Unfortunately, a master policy will only cover areas where there is a collective responsibility. This means that areas of your unit, like the walls, flooring, and fixtures, are not covered under the complex policy. Your condo homeowners insurance plan will cover the parts of the interior structure that you own and the contents within it.
Types of Coverage Available
A standard condo owners insurance policy will include coverage for your building property and your personal property for losses like fire, theft, vandalism and civil riot. The building property cover will pay for losses to any permanent building applications, and the personal property cover will pay for your belongings that are not permanently fixed. Condo policies also include personal liability coverage, medical payments coverage to others, and coverage to cover assessments if there is a loss to the common area. Owners have the option to purchase flood and earthquake insurance separately.
If you experience a loss, having condo owner insurance will pass the burden of replacing your belongings and repairing the inside of your structure to an insurance company. You also have peace of mind that you will have liability coverage if you are ever sued for negligence. Having condominium insurance, while it is not a lender requirement, is a form of protection you should not be without.