How Your Condo Insurance Policy Works

We have all heard the horror stories before from our friends and family about accidents that happen in their condominiums. A water heater breaks nearby and your condo is suddenly full of water. There is water damage to the floors, the walls, and the furniture. Having condo insurance should help to take care of this accident; however, is the coverage you have adequate to make sure you get everything replaced? In this article, we take a look at the most common condo insurance policies and what you can expect them to cover in an accident.

Why You Should Have Condo Insurance

Almost all condos have a Home Owners Association and with them you do have some insurance. Typically, that coverage is only for the exterior of your condo unit covering things such as the roof and outside walls as well as the common areas of the complex. Most HOA insurance will not cover what is inside of your condo and therefore it is your responsibility. Before purchasing condo insurance, it is a good idea to contact your HOA to find out what they do cover. Many HOA's now require that owners purchase an insurance policy that covers the exterior of their condo as well.

Understanding the Condo Insurance Coverage You Need

It is important to understand what type of coverage you will need when insuring your condo. The safe bet is to make sure that you have coverage for anything your HOA and their insurance does not cover. Usually that would mean things like appliances, furniture, clothing, electronics, and kitchen items. Depending on what you find out from your HOA's insurance, you may also need to insure the interior structure of your condo as well.

The best way to make sure that you have adequate condo insurance coverage is to take an inventory of all of your belongings. That would include all of those items described above. Take a look at your copy of the HOA's covenants, conditions, and restrictions (CC&R's) and verify what is covered by their insurance. If the HOA does not insurance the interior structural items such as floors, fixtures, cabinets, and doors you may want to consider the replacement costs and factor them into your condo insurance policy.