In this article, we’re going to cover some of the basics about condo insurance. Learn how to choose the right coverage as well as where to shop for the best deal.
How is Condo Insurance Different from Homeowners or Renters Insurance?
If you’re a condo owner, you know that living in one comes with unique benefits. However, this does change the way your home needs to be insured. Unlike traditional homeowners or renters insurance, condo insurance is specifically designed to protect the unique aspects of condo living.
A traditional homeowners policy is going to have coverage for the entire structure, inside and out. A renters policy does not cover any part of the structure.
A condo policy works together with a homeowners association insurance policy. The combination of these two policies covers the home in its entirety.
What Does a Condo Insurance Policy Cover?
All condo insurance policies can be customized by adding and deleting coverage options. Here are some standard coverages you’ll likely see on most policies:
Dwelling: This is the amount of coverage you have for the structure and permanently attached items.
Personal Property: These are your belongings that are not permanently attached to your condo. For example, clothing, electronics, cookware and furniture are all personal property.
Loss of Use: This coverage pays for living expenses if you have to live somewhere else while your condo is being repaired after covered damages.
Personal Liability: If you are liable for someone else’s injury or property damage.
Medical Payments: Coverage for someone injured on your property, regardless of who is at fault.
Optional Coverages
As we mentioned above, you’ll likely have basic coverage included on most policies. However, only having these coverages will leave you with a lot of gaps. Here are some optional coverages to consider:
Sewer/Water Backup: Covers loss from water due to a sewer, drain or sump.
Earthquake: Damage resulting from an earthquake.
Loss Assessment Coverage: This one is very important for condo owners. Your homeowners association may provide coverage for damage but you are responsible for a portion of the damages. For example, they cover a new $8,000 roof but you are assessed $2,500.
What Coverages Does a Homeowners Association Policy Cover?
Homeowners association policy coverage can vary widely.
READ YOUR BYLAWS!
We cannot stress this enough. It’s important you understand what they cover and what they don’t. Especially when it comes to Loss Assessment.
One of the best ways to handle this is to get a copy of your condo by-laws and send them to your insurance agent. They are well versed in reading the legal speak and can ensure you have the right coverage in place on your condo insurance policy.
Who is Responsible for Damages?
Given that your condo by-laws are highly customizable we don’t want to make any assumptions here. However, in general, your association will cover studs out and you will be responsible for studs in.
In other words, they will be responsible for the exterior of your condo while you’ll be responsible for damages to the interior and your personal property.
Common Claims Covered by Condo Insurance Policies
These claims tend to be the same as a single unit homeowners with claims for wind/hail, burglary and water backup. What is unique is your liability to others for damages. If you are responsible for a fire, it’s much more likely that you do more damage due to it spreading quickly to other units attached to yours.
Not all condo’s are multi-unit though. It’s not uncommon to see associations for detached single family dwellings that are technically considered condo’s.
Tips for Finding the Right Condo Insurance Coverage
Most insurance company’s offer condo insurance but there are a few who don’t. Check with your insurance broker for options.
If you don’t have a trusted agent, ask friends or family for a referral. Also, check out their Google Reviews and see what clients are saying about them. You can see ours here.
Discounts
Just like a homeowners policy, you can bundle your condo and auto insurance. The discount is typically around 15-20% so it’s worth your while to check and see if it makes sense for you.
Other possible discounts:
- Shopping at least 10 days ahead of time.
- Protective devices such as burglar alarms and fire alarms.
- Pay in full
- New condo purchase
- Claims free
- Smart home devices such as water leak detection
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