Purchase personal condo insurance if you own a condominium unit
Do you own a condominium? If yes, then you should purchase a condominium insurance policy even if your condominium/condo association has adequate insurance coverage. This is because the condominium’s association insurance policy covers the commonly owned properties, the condominium building and the required liability insurance, but it doesn’t cover the losses inside a condominium unit. So, you need to purchase a personal condo insurance policy for the required coverage.
Condominium ownership – What it is
A condominium can be defined as a form of legal home ownership wherein the individual units of a comparative big complex are sold. These individual units can be townhouses, renovated apartments, etc. By purchasing a unit of a condominium, you share rights to common areas along with being the owner of the individual unit. The common areas (such as, the hallways, elevators, club houses, etc.) are usually maintained by a condominium association. The owners of the condominium units has to pay a certain amount (usually, a monthly amount) for the maintenance of the entire compound.
Master condo insurance – Coverage offered
The master policy (insurance purchased by a condominium association) can be broadly divided into 2 categories, which are given below.
All-in policy – This policy covers the installations, fixtures, ceilings, floors and improvements that you’ve made within the perimeter walls of your unit. You will have to purchase a comparatively limited coverage if your condo association has an all-in policy.
Bare walls-in policy – This policy covers the real property within the exterior frame. However, it doesn’t provide coverage to the fixtures and the installations within the condominium unit. Therefore, unlike all-in policy, the bare walls-in doesn’t cover kitchen and bathroom fixtures, granite countertops and the flooring. The importance of purchasing a personal condo insurance policy increases if your association has bare walls-in policy.
Personal condo insurance – Coverage offered
You will have to purchase a HO-6 insurance that is specially designed for condo home owners. A personal condo insurance (HO-6) policy covers for financial losses due to windstorm, fire or lightning, malicious mischief or vandalism, smoke, theft, civil disturbance, explosion along with accidental discharge of water. It provides coverage to your personal property along with the structure you own. The policy also provides you with personal liability coverage. It means that the policy will cover the lawsuits if any third person gets injured in your condo premises.
Apart from above, a personal condo insurance policy may also cover additional living expenses if you need to move to another place (for a short period) in order to repair any damage to your condo unit. However, it is advisable that before purchasing condo insurance, read through the terms and conditions in order to find out about the coverage excluded from your policy. It will help you to settle the claim fast if and when required.