Condominium Insurance
For the condominium owner, there are many kinds of policies that can provide the right level of protection. Insurance is designed to bring your condo and belongings back to the same they were in before a loss occurred - a concept known as indemnity in the industry.
Before you buy condominium insurance, you should obtain the master policy from your association showing the building coverage, and the condominium association operating agreement. You need to know what is covered in the master policy to be able to make an informed decision on how to buy your own policy. An experienced agent can help you make the right choices.
There are several different types of condo owners policies offered by a wide variety of insurance companies. Most base policies are similar - the kinds of additional coverage you add on are crucial to protect you completely.
A typical condominium policy covers the following:
- Condo coverage to rebuild your condo to what it was before the loss occurred. This generally covers things that were changed from the original condominium itself, such as a remade kitchen or new hardwoods floors. There are certain circumstances, though, where this coverage is necessary even for the original condo unit.
- Coverage for your personal property - this is normally a selectable number that you select yourself.
- Coverage for loss of use - this reimburses you for expenses if you can't live in your home after a covered loss occurs - primarily for rent to live somewhere else.
- Liability exposures, protecting you from lawsuits for injuries that occur on your premises. Many companies will extend this protection to off premises, as well.
- Medical expenses if someone is injured on your property - note this doesn't apply to you or your resident family.
- Loss assessment - this coverage handles insurance claims "pushed down" by the condominium association to you for non-covered perils or deductibles.
The type of policy used in condo insurance is known as an "HO6.".
- HO6 policies cover against all perils, but are subject to company specific exceptions (typically flood, earthquake, sinkhole collapse, intentional acts, and wear and tear, as well as others)
Some policies will go beyond these core coverages and provide more extensive ones, such as sewer or sump backup, worker's compensation for occasional employees, lock replacement, identity fraud, and more. Mold damage is generally limited in condominium policies. Since much pertaining to mold is out of your control, consider increasing the amount of your coverage.
Policyholders may also purchase coverage for collectible and appraisable personal property - jewelry, fine arts, furs, musical instruments, etc. Pricing for this protection and rules regarding appraisals vary by company.
As an example, to be adequately insured for something such as an engagement ring, though, jewelry should be explicitly covered on a policy. Scheduling a ring normally covers it for nearly all perils, including theft and mysterious disappearance.