Whether you already have a condo, just bought one or are thinking about getting one, you likely have questions about insurance. Can you get condo insurance? Or is it simply the same as homeowner’s insurance? And do you even need it?
Condo Insurance is Unique
Therefore, the insurance policy is going to differ. Second, rules and policies differ from complex to complex, so be sure to talk to your Homeowners Association and ask questions to make sure you get the right coverage for your condo. Find out what they cover and what you need to insure yourself.
It all comes down to ownership. With a condo, you only own the unit from the drywall inward, which essentially is all you are insuring, along with the possessions inside. As a rule the Homeowners Association policy covers the exterior walls and roof. This is because your Homeowner’s Association is the entity that owns the outer building. You, the condo owner, own only your unit and share the exterior protection of the building with the other people who live within it.
You need a policy to cover stuff the Homeowner’s Association won’t cover if a big event occurs, like a fire or the destruction of the building, etc. You need to cover structural elements within your condo including things like appliances, flooring, etc. (these things are typically covered under the dwelling limit part of a homeowner’s insurance policy), it is important to make sure you have a large amount of claim coverage here.
Common Areas for Condo Owners
Condo owners also need to even think about the Common Areas of where they live. When you buy a condo, you become part of a Homeowner’s Association. That usually involves paying dues to the association. Those dues cover a variety of things including paying for the association’s insurance policy. Sometimes, though, the insurance policy won’t completely cover or pay for something.
For example, if a severe amount of damaged is caused in a common area of the building (a lounge, for example), the association insurance policy might not completely cover the cost of repairs. The remainder of that cost is then usually divided up between the residents of the building who have to pay for it in whatever manner the association decides is best. Yes, this is on top of your Homeowner’s Association dues. Condo Insurance policies will often have a section called “Loss Assessment,” and it can be used to cover these types of bills and fees.
Remember . . . . every condo insurance policy, homeowner’s insurance policy, and Homeowner’s Association policy is different. Insurance policies are unique. Make sure you work with your agent and your Homeowner’s Association if you decide to buy a condo to ensure all of your assets are properly covered.