In many situations, a condo association will require each unit owner to purchase a set minimum insurance policy. When a property doesn’t have a specific insurance requirement, an owner can evaluate his unit and possessions and evaluate policies to find adequate coverage to protect him and his house in the event of a catastrophe.
Misconceptions
Some condo owners wrongly assume that their association’s policy will protect them. The condo association’s policy doesn’t cover within the walls of individual units. Often, an owner is responsible for harm due to her unit even when it was brought on by a common building problem or a neighbor’s neglect, and must endure a legal procedure to sue an insurance company for repairs, in the meantime footing the bill for alternative living arrangements.
Condominium Homeowner’s Policy
A condo homeowner’s coverage, also referred to as an HO-6 coverage on Insurance Service Office and American Association of Insurance forms, covers the insured party’s unit and its contents out of instances of theft, water damage and fire. Some policies include coverage for up to 150 feet in the operator’s unit. A liability branch of policy would pay for health expenses in the event a visitor were hurt on your condo. Normally, your coverage would have a reduction of use coverage which pays living expenses throughout the time your condo is uninhabitable due to an accident or catastrophe.
Considerations
Ensure adequate coverage and potentially save money by considering your geographical and building place when deciding your coverage requirements. By way of example, the owner of a condo on the 30th floor of a high-rise can skip flood insurance but should invest in hurricane policy.
Savings
Things you are able to adjust, which influence the price of the condo insurance plan, include the deductible of this coverage and the way that items are replaced in the event of a claim. Normal condo deductibles — the price you pay out-of-pocket when filing a claim for payment — vary from $500 to $1,500 (as of September 2010). A lower deductible effects in a higher annual premium but might be a better choice for people who don’t keep substantial savings. When you submit a claim for loss or damage of personal things, it can be reimbursed at its present replacement price or its actual value, less depreciation for age. The cost of coverage is higher for replacement cost policies, but thus is the payout in claim time.
Warning
Condominium insurance policies might have a reduction assessment insurance policy to protect you in the event your condo association makes a building-wide, unplanned appraisal to remedy a problem, prevent a hazard or fix building harm. This policy might not be adequate, so it is important for owners to evaluate this policy and add additional protection if needed.
Added Coverage
Aside from condominium insurance, appliance insurance also referred to as a home warranty — can protect you when unanticipated issues arise with appliances. This policy repairs air conditioning, washer and dryer units, refrigerators, stoves, microwaves and grills under most policies for a nominal service fee and an annual policy premium from $150 to $600 (as of September 2010).