What is Condo Insurance?
Condo insurance can sometimes seem a little complicated. This is because you aren’t the only person who insures the physical condo. When you own a condo, you usually have a Condo Corporation that also has a financial interest in the units and common areas. Often people think this means that their unit and their financial risk are protected, but that’s not the case.
Condo insurance can be broken down into 5 categories. These are the reasons why you’ll want to have a policy of your own!
Your belongings are not protected under your Condo Corporation’s policy. If your unit gets broken into, or there is a fire that damages your stuff, with a condo policy in place, these items will be replaced. Belongings or Contents coverage on your policy will protect things like your couch, TV, laptop, shoes, clothes, books, appliances…etc.
Depending on your Condo Bylaws, parts of your unit will be insured by the Condo Corporation, and other parts are expected to be insured by you. It’s always important to review your unique situation so that you understand what parts of your unit are your responsibility to protect. For example, windows are commonly expected to be insured by Condo owners, not the corporation. So in the event of a storm, if your windows are damaged you’d want an insurance policy of your own to help repair the damage.
Any improvements or renovations you make to your unit are also not protected by the Condo Corporation’s policy. For example, if you install granite countertops in your unit and a bad claim (like a fire) occurs, your condo corporation is going to rebuild your original unit. If you want your granite countertops back, you’ll need to have insurance of your own, that way you aren’t left replacing them out of your own pocket.
Liability is coverage that protects you financially if you are ever deemed responsible for damages or injury to a third party. For example, you have a contractor over to install new countertops in your unit. They injure themselves on a loose floorboard and bring a lawsuit against you for their injuries. To protect yourself financially having liability insurance is a must.
Additional Living Expenses
Additional Living Expenses Coverage is designed to help with out-of-pocket expenses like food and alternate living arrangements if you’re forced to leave your home because of an insured event or government-ordered evacuation. For example, if a fire claim renders your unit unlivable, you may find yourself with additional expenses that you wouldn’t usually have. Your condo insurance policy would support you financially in situations like this.
Your Financial Assessments
Did you know that when a loss happens if your condo board’s insurance is inadequate, the condo board can assess the cost of the damage back to you? As a condo unit owner, you want to have your insurance policy so that you get 2 critical coverages.
- Contingent Coverage is designed to cover your interest in your unit if your condominium corporation has no insurance, its insurance is inadequate, or it is not effective. So if a loss happens and your condo board’s insurance isn’t going to cut it, they will assess the remaining cost of the damage back to you. As long as the damage is caused by something that is normally covered by your policy, your insurance will respond.
- Loss Assessment Coverage is similar to contingent coverage. While contingent coverage responds when there is a loss to YOUR unit, Loss Assessment coverage responds when there is a loss to collectively owned condo property, and the condo corporations insurance isn’t enough. For example, this coverage protects areas like parking lots and pools. If a loss happens to the pool that is shared by the entire condominium, and your condo corporation’s insurance is not adequate, your condo corporation will assess the cost of the damage back to all of the unit owners.
There are a lot of reasons you as a condo owner want to have condo insurance, and luckily it’s never been easier to buy a policy. With HWI Click you can quote, purchase and manage your condo insurance in minutes. Find out how affordable condo insurance is by getting a quote from anywhere at any time, on any device!