How to Determine What Type Of Condo Insurance to Buy?
Condo insurance is not the same as insurance on conventional
homes or renters. Condo owners need to ensure that their policies
cover all their possessions that are not covered by the Condo
Association’s insurance policy. By reading the fine print in the
purchase agreement and the insurance policy, a condo owner can
determine exactly what type of insurance policy will cover what is
not covered by the collective insurance already provided.
The condo association will normally collect dues from owners to
cover common areas of the complex and sometime installations. The
association’s bylaws will state exactly what is covered under the
association’s policy. The association’s policy may have a
deductible, which is usually divided equally among the unit owners.
Collectively, owners may have a “bare walls” policy which covers
all real property from the exterior framing inward, but does not
cover fixtures or installations within a condo unit. Another type
of policy referred to as an “all in” policy covers fixtures and
installations, along with the structure and any common areas. The
owner needs to know if the policy is cash value, which covers the
cost of replacing the items minus depreciation, or if it covers the
full replacement cost.
If the association has a bare wall policy, the owner must buy
insurance to cover features such as countertops, bathroom and
kitchen fixtures, flooring and personal items. With an all in
policy, the owner may only need to cover personal items. Most
insurance companies offer a special unit owners policy, but to save
money and ensure that all items are covered, the condo owner needs
to determine what he owns and what is covered by the association’s
policy. Condo owners are typically responsible for insuring just
their property, but the rules differ from complex to complex, and
it's important to ask the right questions to ensure you have proper
insurance coverage. Usually, condo owners are not responsible for
cutting the grass or shoveling ice from the front walk, but they
must insure that the proper condo insurance is in place to protect
them from any lawsuits related to these things.