The kind of policy you require to protect your vacation home…
If you own a condo, having a condo insurance policy can give you a much needed feeling of comfort and security. Condo insurance is an insurance policy that offers protection against repair expenses and losses for a condominium unit.
It can safeguard you from losses arising from vandalism, theft, water damage, and fire damage. Moreover, you can also opt for additional coverage for further protection.
Condominium insurance coverage provides comprehensive protection against damage to the physical structure of your unit, along with safeguarding some of your personal belongings. The coverage details can include:
A condo insurance policy can protect your unit against various types of theft. It may also take into account the cost of theft from an unattended boat or car that you own.
Personal Property Coverage
Personal property coverage, also known as contents coverage, refers to protection for personal possessions and furniture against covered risks like lightning, fire, and hail. It ensures that your condo is protected sufficiently up to the amount you paid.
Special Liability Limits
Majority of condo insurance policies have special liability limits for certain kinds of property. For example, $300 for coins and money, and $1500 for theft of watches, furs, and jewelry. You can also opt to increase the limits.
Liability coverage can generally compensate for up to $1000 per person in medical payments. No matter how much your legal responsibility amounts to, this coverage takes into account guests who get injured in your condominium. In certain circumstances, it can provide higher coverage or other related coverage as well.
Personal Liability Protection
This comes into play when someone files a lawsuit against you for hurting them or damaging their property. Personal liability protection can take care of the related legal costs and damages.
Generally, condo insurance policies offer a minimum of $100,000 in personal liability coverage. This takes into account bodily injury and property damage to others that is your or your covered household members’ legal responsibility.
If you happen to unintentionally damage another person’s personal property while it is in your care, a condo owner’s policy can help. It can typically compensate for up to $1,000 for each covered incident.
For instance, a thief breaks in and takes away your television, some jewelry, and necklace. Condo insurance would compensate for these losses after subtracting the deductible.
However, certain valuables may only be covered till a certain by a regular condo policy. You may be required to buy extra coverage if you own expensive items.
Dwelling and Additions
Condo insurance can offer coverage can offer some extra coverage as well. As per your condominium declaration or bylaws, or your state of residence, you may be responsible for interior aspects of your condo unit, like walls, glass, and doors.
Additions, changes, and other improvements can be covered in the policy up to the dwelling limit. It is important to check which coverages apply to the policy you are purchasing. Coverage types are:
This takes into account all components built into your unit, such as appliances, light fixtures, cabinets, and any improvements made to these items. Check if your homeowner’s association insurance has this coverage. If it does, then you do not require dwelling coverage on your condo insurance policy.
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Single Entity Coverage
This is similar to all-inclusive coverage. However, it does not take into account any alterations or improvements that you make to the condo. If you substantially upgrade your unit, you may like to add building property coverage to your condo insurance policy.
Bare Walls Coverage
This takes into account floors, walls, and ceilings of your condo unit minus the attachments such as light fixtures, appliances, sinks, or carpets. You can get this coverage under your individual condo insurance policy. Bare walls coverage is the reason why condo policies are also known as “walls-in insurance”.
Extra Living Costs
If your condo unit gets damaged, you may have to move out while it is under repair. In this case, loss of use coverage is helpful. This policy takes into account extra living expenses incurred, such as meals, hotel stay, and laundry.
The coverage is usually a percentage of the contents coverage amount you opted for. Nevertheless, this aspect of condo insurance contains coverage terms and limits.
For instance, your condo unit suffers damage due to a burst pipe. In this case, your insurance policy may include restaurant meals and hotel bills that would exceed the amount you would have spent living in your condo.
Loss Assessment Coverage
Condo insurance typically provides up to $1,000 of protection in case the damage to commonly owned property is higher than the condominium association’s insurance coverage. If the condo association takes into account the extra loss of all unit owners, this coverage will prove to be useful. The amount of coverage can be increased.
Other Structure Coverage
There may be structures other than your condo unit in your ownership, such as a storage shed, detached garage, or car porch. In case these buildings are not considered common property, they would usually not be taken into account by the association’s insurance policy.
Here is some extra coverage that you can choose as part of your condo insurance policy:
Contents Replacement Expenses
This is also known as personal property replacement cost. It compensates for personal property loss and depends upon replacement cost when the loss occurred. This aspect does not imply any deduction or depreciation.
However, the coverage is based on applicable policy limits and deductibles. Certain limits are applicable for things like watches, jewelry, and fur.
Widened Content Coverage
“All-risk” protection is provided by special personal property coverage. This coverage takes your possessions into account.
If your personal property gets damaged, this aspect can offer compensation. Nevertheless, it contains certain terms and limits.
Valuable Items Plus
This aspect offers protection for special items such as musical instruments, fine art, jewelry, and home computers. It provides coverage for a variety of losses and contains higher limits. Appraisal or listing of insured items is usually not necessary.
This can raise your policy limits by up to 10%. It comes into play when you use green processes or environmentally friendly materials for rebuilding a covered loss. For instance, if you repaint a damaged room with environmentally friendly paint, you would be eligible for a higher limit.
Sump Pump Overflow and Water Backup
This can take into account property damage from sump pump overflow or sewer backups. Damage as a result of flooding or surface water are not included in the coverage.
What’s Not Covered by Condo Insurance?
While condo insurance is comprehensive, here are some aspects it typically does not cover:
Professional services or business pursuits are usually not included in a condo insurance policy. If you are looking for this type of coverage, it is best to opt for a business owner’s policy.
Condo insurance policy generally excludes damage from natural disasters. Examples of natural disasters include earthquakes, mudslides, deterioration, settling, nuclear hazards, contamination, and damage by rodents, insects, birds, or domestic animals.
Your vehicles would not be taken into account by a condo insurance policy. Vehicle-related aspects include ownership, use, operation, motor vehicles, aircraft maintenance, and some types of watercraft.
How to Save on Condo Insurance?
There are several ways in which you can reduce your costs when it comes to condo insurance. You can:
- Bundle your condo and auto insurance with us.
- Avail of a discount by upgrading your unit with a fire sprinkler system or a burglar alarm.
- Raise your deductible if you are confident that you have adequate savings to pay a higher amount in case of an emergency.
- Avail of credit if you are retired or work less than 24 hours per week.
Benefits of Condo Insurance
Don’t make the mistake of thinking condo insurance is a waste of money. In fact, if you own a condominium unit, it can be one of the most fruitful investments you make.
When you buy a new home, the possibility of a complex situation arising may not be in your mind. However, it is important to have a condo insurance policy in order to protect yourself from a financial loss due to any untoward incident. Here are some of the major benefits of having condo insurance:
A master insurance policy generally takes into account the building plus the common areas. However, its coverage typically ends at the exterior walls.
For instance, if the structure burns down, the master policy would fund the construction of the new building. However, the condo owner would still have to bear the costs of fixtures, fittings, and in some cases even the dry walls. It may be hard for you to get the light fittings, cabinets, and carpets replaced from your own pocket.
If someone sustains an injury on the condo property, a master policy would only compensate for claims where the event took place in a common area. This means it won’t take into account someone slipping on the floor inside your condo unit.
Condo insurance also protects you against property damage claims. For instance, your nephew throws a ball which smashes the glass of the foyer window. In this case, a condo insurance would protect you against the legal expenses if the association sues you for damage to common property.
Burglary, vandalism, and theft can occur without warning. Moreover, water damage due to pipe leakage and fire damage can seriously damage the interior of your condo, your furniture, and personal possessions.
A master policy would not take any of these eventualities into account. This is why an individual condo insurance policy is important for safeguarding you against destruction, damage, and theft of your personal property.
Loss Assessments and Deductibles
You may be paying monthly dues to pay for your master insurance policy, but this may not be the only cost you incur. If the condo association happens to file a lawsuit against the master policy on the basis of under insurance, you may be assessed for your share of the extra cost as an individual owner.
Even if the policy fully compensates for the repairs, the master policy will entail a deductible. Each owner would need to pay for their part. Condo insurance can protect you in case of assessments conducted with regards to the master policy or deductibles.
Loss of Use
In case of a catastrophic event, you may need to vacate you condo unit for the time being. You may need to stay in a hotel and order meals. The coverage is typically a portion of the contents coverage amount.
A condo insurance policy can compensate for the costs that exceed the amount you would have paid while living in your condo unit.
No matter how many safety precautions you take, it is not possible to completely eliminate the possibility of an untoward incident taking place. As an owner of a condo unit, your home may be susceptible to theft, vandalism, lightning, or fire. Moreover, there may be the risk of property damage or bodily injury to another person.
Condo insurance provides an effective backup in case of a major financial loss due to the covered risks. AC Insurance has been providing top quality condo insurance policies since 1991. Click here to get a free quote today!