Just because you don’t actually own the building you live in, doesn’t mean you don’t need insurance.
As a condo owner, you might think the homeowners association’s blanket insurance policy will cover your belongings, but if you would be wrong. If your condo suffers fire or storm damage, the association will rebuild, but the contents of your home will be lost forever.
The good news, however, is that purchasing a condo policy will provide the protection you need against accidents, damage, theft, or other setbacks that could seriously harm your finances.
Types of Insurance
Generally speaking, insurance covers damage to your dwelling and its contents, from specific named hazards like fire, smoke, explosions, lightning, hail, wind, riots, vandalism, theft, falling objects, and damage caused by aircraft or motor vehicles. In some cases, this insurance, which is referred to as “broad form” even includes clauses protecting your home in the event of terrorism.
In addition, there’s also “special form” insurance, which covers your personal property, including everything from carpeting and appliances to electronics and jewelry, from the same named perils.
If that doesn’t seem like enough, there’s also “comprehensive” insurance, which protects your property from all risks not specifically named, though it is much more expensive than broad or special forms of coverage.
What Condo Owners Need to Know
Before you begin shopping for condo insurance quotes, be aware of what your association already covers. If your condo is actually a co-op, this is fairly simple, but if your home is a true condominium, the details may change.
Almost all associations have a master policy that covers the actual structure and all common elements like swimming pools, tennis courts, or club houses, and spell out where the association responsibilities end and individual owners take over.
For example, if you live in stack-up condos, and your bathtub overflows and floods the unit below you, you might not even have to file a claim, because either the association policy, or your neighbor’s policy may cover all of it. Then again, they may not, so read your copy of the master policy and/or the association by-laws before shopping.
Once you know what is covered, follow these tips when shopping:
* Consider the coverage limits and the value of what you actually own. Spend the money on extra endorsements or riders if you own expensive electronics, antiques, art, or jewelry.
* Be sure your coverage is based on replacement cost, not actual cash value, so that any of your belongings that are destroyed, damaged, or stolen are replaced at current costs, not the value of the item minus depreciation.
* Include liability coverage. This way if you forget to blow out a candle, and it causes a fire, you’re protected.
* Consider a “loss of use” clause, which will cover a hotel stay in the event your condo is rendered unlivable.
* Always ask for discounts for such things as dead bolts, fire extinguishers, smoke detectors, and bundling your condo policy with the same company that insures your car.
Where to Find Condo Insurance
If you own a car, check with the company covering your vehicle first. If they’re a mainstream insurer, they probably offer homeowners policies, or have an affiliate who does, which will help net you that discount for bundling. If they do not, other sources of insurance include:
* Search the Internet for insurance companies in your region.
* Employee benefits plans often include insurance discounts for home/auto coverage.
* Contact the company that holds the master policy on your condo complex
* Ask your neighbors.
* Ask your Realtor.
Finding condo insurance is actually the easiest part of the process. Comparing rates and coverage is a bit trickier, but it’s essential that you do compare, to make sure you’re getting the best possible rate for the coverage you need, and remember: you can always take time to think about a quote, and you can always ask questions if there are items you don’t understand.