Condominium Insurance: What You Should Know
Insurance coverage for a condo owner is much different than that of a typical homeowner or renter. Condo owners have a unique situation in that the exterior shell of the condominium building is jointly owned by other unit owners while the interior space is privately owned by the individual. Because of this, there is both individual and joint ownership of the structure which results in the need for both joint and individual insurance policies. This can be a complex undertaking, but to cut through the confusion, here is a basic overview of how insurance for a condominium is structured and what a condo owner can do to optimize coverage:
The Master Policy
Typically, the condominium association, comprised by all of the unit owners, insures the shell of the structure. That means the condo/co-op board covers common areas shared with others in the building such as roof, basement, elevator and walkways for both liability and physical damage.
Individual Policy
In addition to the Master Policy, condo owners must secure additional coverage as they are responsible for insuring the inside space of the individual unit covering such things as structural improvements, personal possessions and expenses involved in fire, theft or other disasters in addition to liability protection.
Know the By-Laws
It’s important to know where the association’s coverage stops and where an individual’s insurance begins. In some situations the condo/co-op association is responsible only for insuring the bare walls, floor and ceiling so the owner must insure items such as plumbing, wiring, bathroom fixtures, etc. It’s important to read the association’s by-laws to ensure proper coverage by individual insurance for anything not covered by the condo/so-op
Additional Coverage to Consider:
Unit assessment: This reimburses you for your share of an assessment charged to all unit owners as a result of a covered loss. For instance, if there is a fire in the lobby, all the unit owners are charged the cost of repairing the loss.
Water back-up: This insures your property for damage by the back-up of sewers or drains. Water back-up may not always be included in a policy. Check to see that it is included.
Umbrella liability: This is an inexpensive way to get more liability protection and broader coverage than is included in a standard condo/co-op policy.
Flood or earthquake: If you live in an area prone to these disasters, you will need to purchase separate flood and earthquake policies. Flood insurance is available through FEMA’s National Flood Insurance Program ( http://www.fema.gov/nfip/). Both flood and earthquake insurance can be purchased through your insurance agent.
Floater or endorsement: If you own expensive jewelry, furs or collectibles, you might consider getting additional coverage since there is generally a $1,000 to $2,000 limit for theft of jewelry on a standard policy.
Discounts: Also don’t forget to ask about all available discounts. You can reduce your rates by raising your deductibles and by installing a smoke and fire alarm system that rings at an outside service. If you insure your unit with the same company that underwrites your building’s insurance policy, you might also get an additional reduction in premiums.
Condo insurance can be complex but the agents at Huntingdon insurance company can help you learn everything you need to know about getting the right coverage. Call (215) 942-0616, contact us via email at quotes@huntingdonins.com for answers to any questions you may have and to get a FREE no-obligation quote.