Condo insurance is a special type of homeowners insurance for condominium owners. Condo owners have different insurance needs from other home owners. This is due to the shared responsibilities that are associated with condominium ownership.
The condominium association is generally responsible for purchasing a master policy covering the structure of the building, its exterior, and other common areas within the complex.
However, this coverage does not eliminate the need for each unit owner to obtain their own policy because the master policy only provides coverage for specific items.
Condo insurance is designed to supplement the master policy—preventing gaps in coverage while avoiding the unnecessary cost of duplicate protection.
It provides coverage for personal property such as furniture, appliances, and other items that are not already covered by the condo association’s master policy. It also provides liability protection for injuries and damage for which the unit owner is liable.
DETERMINE WHAT ADDITIONAL COVERAGE IS NECESSARY
The amount of coverage required by a condo owner depends on the policy obtained by the condominium association. Before anyone buys condo insurance, they should be aware of the specific coverage provided by the association’s master policy, and in particular, any gaps in that coverage.
A condominium association’s bylaws and in some cases, state laws, govern the type and extent of insurance coverage required to be provided by the master policy. This coverage typically corresponds to one of the following three levels:
|Coverage for the building (bare walls, floor, ceiling, stairs, and elevators) as it was originally built.||Yes||Yes||Yes|
|Coverage for the carpets, wall coverings, appliances, cabinets and other interior furnishings.||No||Yes||Yes|
|Coverage for any additions or renovations made by the current or previous owners.||No||No||Yes|
|Coverage for the owner’s furniture and other personal property.||No||No||No|
The above levels of coverage are examples only and individual policies may vary. For example, some policies may even exclude the interior walls, plumbing, and wiring. You should ensure your condo insurance provides appropriate coverage for the items not covered by the master policy, or additional protection for any items where you believe the coverage provided by the master policy is insufficient.
As with any homeowners policy, you should ensure you are aware of the covered perils and any exclusions, particularly earthquake and flood damage, before you buy any policy.
If you still have questions about what exactly is condo insurance then read here.