Condominium Insurance 101: What It Is? What Does It Cover?

Condominium Insurance 101: What It Is? What Does It Cover?

Your condo is your home sweet home. It is the place that will or has been witness to the best of your memories. And thus, like every special thing, it needs protection. Though you might already have the condo association’s policy, unfortunately, that does not cover your personal space. And thus arises the need to buy a condominium insurance policy for yourselves and your family. And here we have everything you need to know to get started.

But let’s start with the basics.



What Is Condominium Insurance?

As the name suggests, this policy protects your condominium. It protects your flooring and roof, furniture, and other belongings like clothes, refrigerator, television, etc. In general, it provides you with the losses and repair costs. Often condominium insurance covers vandalism, fire and water damage, and theft.

Also read: Specialty Insurance: What It Is? What Are Its Various Types?

But always remember that your policy will not protect you from most natural calamities like earthquakes, floods, sinkholes, etc. If you live in a high-risk zone, you must consider getting coverage for that calamity as well.



What Does Condominium Insurance Cover?


#1: Condo Building Property Coverage

As we know, the condo association policy already covers the common area, the roof, etc. But if, say, the damage appears on the ‘wall-ins’ of your condo, then building property coverage of your condo policy needs to step in. By wall-in, we mean your side of the roof surface, the lower face of the roof in this case.

So, what else does condo building property coverage include?

This coverage protects the inside of your condo like floor, interior walls, sinks, cabinetry, tiling, and other permanent stuff.

Also read: Identity Theft Insurance 101: What It Is? What Does It Cover?

But things can get tricky when two or more condo units or a condo unit and common area are involved. If water damage affects two condo units, then both the condo insurance policies will come into play. And the condo association policy and the personal condo insurance will cover the second case.


#2: Condo Contents And Personal Property Insurance

Condo policies are very much like the homeowners’ insurance policies. Like a homeowners’ policy, a condo policy also protects the contents of your house. But which contents of your home are protected? And will they be protected while not inside the house, say, while you are traveling with them? Let’s see.

All contents of your house are protected, like furniture, electronics, and clothing, etc. If any personal property is destroyed due to any covered peril, the insurance company will pay you up to your coverage limit. Though usually, a separate deductible applies to all the coverages.

The most commonly covered perils are theft, fire, and lighting. Consider a situation where lighting strikes your house by starting a fire. You call the fire brigade, but your furniture is already burnt to ashes. Here the policy will cover your furniture and other repairs.

Lastly, you do not need to be at home for this coverage to apply. As if somebody steals anything from your car while you are out at the grocery store, again, the coverage can be called to action.


#3: Condo Liability Insurance

Liability insurance is a must-buy for all property owners. Suppose anybody gets hurt or suffers any property damaged while at your place, condo liability insurance kicks in. Yes, it protects you from both lawsuits from bodily injury and property damage.

Condo liability limits are primarily up to $100,000, but you can raise them to $500,000 for a higher premium. But if you desire an even higher coverage, consider opting for an umbrella insurance policy. (More on that later)



What Are Some Additional Condominium Insurance Coverages?


#1: Loss Of Use Coverage

Loss of use coverage is additional coverage. However, it is optional, but as it is with insurance, you never know when you might need it.

This coverage is also called additional living expense coverage. It kicks in when your condo is uninhabitable due to a fire or evacuation order, which results in you having to live somewhere else. It will pay for the rent, the food, and sometimes even for the higher commute expenses.


#2: Vacant Condo Insurance

Aptly named, this coverage kicks in when your condo is vacant- for typically at least 30 days. Your condo is more vulnerable to perils and break-ins when you are not in the house. Thus even your standard condo policy will not cover your vacant home.

Also read: Earthquake insurance: What it is? How does it work? What is covers?

Thus, if you will be away for more than a month, it is always good to consider this coverage. It comes at an additional cost but, still, this expense is better than shouldering the total fire damage or a break-in.


#3: Earthquake AND/OR Flood Insurance

Disasters like earthquakes, floods, and sinkholes cause massive destruction, and thus insurance companies need a separate policy for covering these disasters. Yes, your condo insurance will not cover these incidents.

Furthermore, your mortgage company might need you to buy these policies if you live in a high-risk zone.


#4: Umbrella Insurance For Condos

Worse times can get worst, and that too without warning. If a simple get-together goes wrong and all of them sue you for their losses, will you or your standard condo policy be able to bear the expenses? Well, if not, then you must consider buying the umbrella insurance. Umbrella insurance is liability coverage that picks up where your existing liability coverage ends.


#5: Collectibles Insurance

Most of us have jewelry at home. While some of us also have artwork collection, stamp collection, etc. These are expensive and special to us. And your basic condo policy doesn’t cover them. But worry not because collectibles insurance has got you.



In A Nutshell…

Condominium insurance is a must-buy, and especially if your house is on a mortgage. It ensures you and your finances are secure in case of any mishap. With insurance safety, you can enjoy your moments in your house with much more peace of mind.

Coverages like liability, personal property, and building property are essential. But additional coverages like additional living expenses and floods and earthquakes etc. might seem unnecessary for now. But save you a lot of worries when some peril does occur.

So, with this, we wrap up. We hope you found the above information helpful. And if you have any doubts, suggestions, and questions, please drop them below. We are all ears and reply ASAP!