One of the most complex home insurance policies include condo insurance. It does not seem very important. However, contrary to what you think, the truth is that you might need condo insurance more than you think you do.
It must be remembered that people living in a condo do not own the building. It is the homeowners association which makes sure that any accidents outside the building are taken care of. However, they may not cover for any restoration needed inside the condo, any stolen items, or even cover for guests who may be injured inside the unit.
Thus, since you may not know about the many loopholes in the HOA coverage, it is always a wise decision to secure yourself with condo insurance. This is also known as an HO-6 policy.
The following article tells you everything that you need to know about condo insurance.
Table of Contents
What Is Condo Insurance?
Condo insurance is a coverage scheme bought by the owner of a personal condo. It provides coverage in case anything happens to your personal belongings.
Types Of Condo Insurance
If you own a condo, you should know that there are two types of insurance policies that will cover you: homeowners association insurance, also referred to as the master policy or HOA insurance, and condo insurance which is also quite popular as an HO-6 policy.
The homeowners association insurance covers for any liability that may occur outside the building or in the building’s common area.
On the other hand, your condo insurance will cover for everything inside your personal unit including your personal belongings. This is inclusive of “loss assessment” coverage which insures your fraction of damages to the building common areas.
The condo insurance is affected by your building’s master policy. Therefore, when you purchase a condo insurance, you should make sure that it covers things that the master policy does not.
Your building’s HOA insurance typically covers the following things:
- Any damage to the building’s outer structure e.g. in case of a fire or any damage to the roof. Moreover, it also covers damage to the walls and things like wiring, plumbing, and insulation etc. In addition to this it also covers for condo fixtures like floors etc.
- Any damage to the shared luxuries and common areas like tennis courts.
- Any harm that comes to guests in the building’s common areas..
The condo insurance, or the HO-6 policy covers for the following things:
- Any damage that occurs inside your condo: Although you do not own the entire building but you must remember that you are the owner of your own condo. Thus, it is your responsibility to make sure that your belongings are covered for. However, it also depends on your building’s HOA policy. If your building follows the ‘all-in’ policy, then you do not have to cover for things such as plumbing and lighting. However, this is not the case if the building follows the ‘bare-walls’ policy, according to which only the walls, floor, and ceiling are covered.
- The HOA will not cover any personal items that are stolen. Therefore, you need to have condo insurance for that.
- If a guest has an injury inside your condo, then you are responsible for it. In such a case, an HO-6 policy proves to be quite helpful as it covers all medical bills for your injured guest.
- If you cannot live in your condo for some time due to an issue such as fire etc, then having condo insurance makes sure that your hotel bills are covered.
- Lastly, it is great to have condo insurance to cover for anything that the HOA policy does not insure. In some drastic situations, condo owners may also have to pay some amount to cover the damage. If such a situation arises, it is better to have condo insurance and be covered for it. In addition to this, having loss assessment coverage may also be of some help as it will partly or completely cover such losses.
How Much Does A Condo Insurance Cost?
There is no fixed rate that would tell you the cost of condo insurance. This is because it depends from company to company. However, if an estimated amount was to be given, an average of $100 – $400 are needed for condo insurance. You must also never forget that the cost can vary on the basis of numerous factors such as:
- Your residential area.
- The quality and the materials used in building your condo.
- How much does the master policy (HOA insurance) cover?
- The insurance options that you have.
- Your deductible amount.
How Much Coverage Do You Need?
In order to know how much coverage you need, you should know whether your building follows the ‘all-in’ or ‘bare-walls’ master policy. This will help you figure out the choices you should make when it comes to purchasing condo insurance.
You should figure out how much coverage is needed to secure your personal items and other aspects of your condo, such as flooring, countertops and other fixtures like built in refrigerator and items including furniture etc. Moreover, you should also include any expensive artwork that you may have.
It is not an easy task to find out how much coverage you need for condo insurance. Therefore, after you have determined all other nicknacks, you need to figure out the cost required to restore your condo if any severe accident was to happen. If you want to know the precise amount that a condo insurance would cost you, then it is suggested that you seek help from an architect or designer who would tell you the value of your apartment. Moreover, you can also take help from your insurer or mortgage lender.
In case your lender is unable to provide any substantial information, and you don’t even receive an authentic answer from an architect or designer, then it is suggested that you see how a quote estimate operates with your monthly budget, the risk factor, and your savings.
Condo Insurance Claims
If you experience any accident or loss to property insured by your policy, you can receive a refund for your losses by filing a claim. To file a condo insurance claim, you must follow the given points:
- Note the date and time when the incident took place.
- Take a photograph of all damaged goods.
- Make an extensive list of items that were damaged or stolen and write down the estimated price of each item.
- Immediately called your insurance company.
- If you need to get any repairs done, then you should get an estimation from your contractor as to how much it would cost to fix the items.
- Request your contractor to be there when the claims adjustor is looking at the property loss and damage.
Now that you know everything about condo insurance and the coverage you may need, we suggest you to not waste any more time. Get you condo insured right now and live a stress free life.