Insuring Condos

Insuring condos has become a significant part of many insurance company's offerings due to the increase in this type of home ownership.  When you purchase a condo and obtain financing the financial institution will require insurance to protect their investment.  Normally there are two separate policies required to protect you investment. 

As the condo owner your own insurance policy which covers your personal possessions, structural improvements, additional living expenses in the case of a fire, theft or other disasters is listed in your policy.  This part of your insurance coverage also protects you in cases of liability.

The second policy required is called the "master policy" which is provided by the condo board.  This covers the common areas you share with others in the complex like the roof, basement, elevator, boiler, walkways, as well as many other areas for both liability and physical damage.

When insuring condos it is important to know which structural parts of the building are covered by the condo association and which are not.  You can find this information by reading the association by-laws.  If you have any questions about what is and is not covered, talk to your association, insurance agent, or attorney.  It is important to find out exactly how the insurance is structured when buying.  If the insurance covers the units as they were originally built then you may be responsible for any alterations to the original structure, like remodeling the kitchen or bath.  Sometimes this policy not only includes the improvements you make but those by previous owners.  In other situations, the condo association may be responsible only for insuring the bare walls, floor and ceiling.

There are some other areas that you need to ask your insurance agent about additional coverage such as, unit assessments, water back-up, umbrella liability, flood or earthquake and floater or endorsement.  When insuring condos it is important to find an agent who specializes in condominiums and don't forget to ask for valuable discounts.  You can reduce your rates by raising your deductible and installing smoke and fire alarm systems that are connected to the local fire department.  Additionally, if you insure your unit with the same company that underwrites the building's insurance policy you might receive a reduction in your premiums.

Owning your own home or condo is a big step toward financial security and to make certain your investment is protected it is important that you choose the right insurance agent and the coverage required.