Do You Know These 5 Details About Condominium Insurance?

Wherever you reside, there is an insurance policy for coverage, and condominiums are no exception. However, specific rules concerning condo ownership make individual policies more complex than a renters or homeowners policy.

Furthermore, owners typically insure a segment of their property and rules vary from one complex to another, so it’s important you have the appropriate insurance coverage. Here are 5 details you should know about condominium insurance.

1. What Is Condominium Insurance and How Much Do You Need?

Condominium insurance offers coverage for the things contained in your condo. Condo association will typically cover your condo’s exterior; therefore, condominium insurance covers the interior as well as your possessions.

Purchasing this form of insurance will save you money in the event of an accident. Without it, you may end up spending considerable money trying to replace your property or your neighbor’s.

When it comes to determining the amount of coverage to purchase, owners may have a difficult time making a decision. This is partly because the differences between what associations and owners cover can be tricky.

Once you establish the parts you must insure in your unit, you need to determine the amount of coverage to acquire. You can estimate coverage by establishing the amount paid for recent upgrades by other owners.

Another way of obtaining an estimate involves conducting an inventory of your personal items and determining the amount it would cost to replace your belongings following a fire or burglary.

2. How to Purchase Condo Insurance

While there are numerous ways of buying insurance for your condominium, it’s best you collaborate with an independent agent. A local agent in your area can compare insurance rates from various insurance carriers and help you select the best policy for your unique needs.

Moreover, your agent will offer consultation on different options and accessible discounts. For instance, it may be possible to bundle your condo and auto insurance for a multi-policy discount. When purchasing condo insurance, you should also consider these factors:

• An estimated value of your personal belongings

Condominium insurance can cover your personal belongings if they’re damaged, stolen, or ruined. You could easily underestimate your property’s value or forget items such as furniture and clothing.

Nevertheless, a full inventory can help ensure you’re not underinsured while avoiding future frustration. Make sure you also include expensive or unique items, such as artwork and jewelry.

• Estimate extra living expenses

In the event that you couldn’t live in your condo because of repair or replacement, would you have sufficient coverage to reside somewhere else?

If you don’t consider additional costs into your insurance, you could end up funding basic expenses from your pocket. For this reason, it’s important you consider your family’s daily needs and expenses when talking to an agent.

3. What is the Master Policy and What Type Do You Have?

The master policy aims to cover the areas you share with fellow tenants. Additionally, it may cover your unit’s structure as it was built originally and possibly your unit’s fixtures. The two kinds of master policies are:

• Bare walls-in

While this policy covers real property including exterior framing, it doesn’t cover the installations and fixtures within your unit. Therefore, the policy doesn’t cover things such as granite countertops and kitchen fixtures.

• All-in

The policy covers installations, fixtures, or additions within the internal surfaces of the floors, perimeter walls and ceilings.

4. What Does Condominium Insurance Cover?

• Personal belongings

You’ll need sufficient insurance to replace or repair your stuff if damaged or stolen.

• Liability

If guests sustain injuries, this form of insurance can cover the bills if you’re found liable.

5. Is Condo Insurance Tax Deductible?

Similar to homeowners insurance, this kind isn’t tax deductible. However, if you rent the condominium, you may deduct the cost of your landlord or condo insurance as it relates to wear and tear or depreciation.

Additionally, if you run a business out of the condominium, you can deduct a fraction of your condo insurance from your taxes.

Final Thoughts

While purchasing a condominium can be a gratifying experience, you can’t afford not to purchase insurance. Otherwise, you may find yourself in complex situations when accidents arise in your premises. Fortunately, condominium insurance helps protect your belongings, so make it a priority.

Image: Flickr

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