Though most condo complexes are insured through associations, unit owners can still benefit from having separate insurance policies. Since everyone in each complex shares ownership of the hallways, the pools, and other common property, they’re all responsible for the coverage. That’s where condo association insurance comes in. However, unless residents get extra coverage, individually owned parts of condos will remain uninsured. This puts owners at risk for serious financial losses.
Master Policies
The worst kind of condo association coverage is called “bare walls in”. Anyone with this master policy should definitely get back-up. It doesn’t cover floors, ceilings, interior walls, permanent appliances, fixtures, or even countertops. “All in” master policies are much better; they cover most everything within a condominium. Those lucky enough to have “all in” coverage might not even need more, but they should still check just in case. Condo insurance can be tweaked so it doesn’t fit into either category. Associations all have their own individual bylaws listed to further explain each policy, so owners should check these before deciding on personal condo insurance.
Association Coverage
Most condo association policies cover carports, garages, clubhouses, cabanas, recreation areas, utilities, machinery, fences, and other common property. However, these won’t be covered if the damage is caused by something excluded from the contract. Associations might refuse to pay for damage caused by flooding, earthquakes, mudslides, fires, high winds, or military action. Condo residents should check their master policies to see what they need. Whatever the emergency, owners can avoid massive expenses, so long as they have the right condo insurance coverage.
Hidden Costs
Even for those who have “all in” coverage, unexpected bills could arise if disaster strikes. Policies from associations usually include deductibles. If one complex gets seriously damaged, this fee will be split between all of its residents. If the deductible is $150,000 and there are 22 condo owners – well, you do the math. It’s certainly not going to be cheap. Something else to keep in mind is cash value compared to replacement costs. While the cash value of belongings like computers and televisions depreciates, their replacement costs stay the same. Condo owners have lost thousands by insuring only the cash value of their homes’ contents and structure.
Complete Insurance
Associations’ condo insurance covers buildings, common property, and company liability. However, it does not cover burglary-related losses or medical bills. Owners need special condo insurance to stay unruffled in these situations. If someone slips on a slick kitchen floor and sues, the condo owner will be not covered. If a burglar snatches the satellite dish from outside, the cost will not be the insurance company’s problem. Also, while a Master Package Policy may cover “the building” as a whole, it will prove worthless when the interior of one unit gets damaged.
Important Extras
Firstly, personal liability coverage is a must. Owners without it will be financially responsible for fires started with their candles and in-home injuries. Another practical addition to condo insurance policies is “loss of use” coverage. This takes care of renting expenses when a condo becomes unlivable, whether it’s due to damage or reconstruction. Then there are comprehensive forms, which may be costly, but only because they cover valuables that aren’t mentioned in the paperwork. Little extras like this are certainly worth adding; it’s always good for owners to know that their condo insurance has them covered, no matter what.