Condominium Insurance Explained
Shopping for a condominium insurance policy is very similar to shopping for a homeowner’s insurance policy.
It can be very confusing trying to compare coverages between companies.
What are all these optional coverages, are they something you really need?
While the quote sheets may look the same there can be significant differences between companies and what they actually cover within their policies.
Most people don’t read the policy once it is issued and fully understand what is covered
Dwelling Coverage – Coverage A on the quote.
This is the amount you get to rebuild your condo if it is destroyed.
This is probably the most confusing part of insuring your condo.
The place to start is with your condo association.
Find out what the association’s insurance covers when it comes to rebuilding the condo.
Does it cover construction from the studs out?
Or does it include any of the interior of the condo, for example, it might be rebuilt to builder specifications but you are responsible for the cost of any upgrades that were added.
Once you learn what you need to cover then discuss the value needed to insure your portion with your agent.
Personal Property – Coverage C on the quote.
This is how much money you get to replace all of your personal contents in the home.
The most important thing is to make sure you have Replacement Cost Coverage.
This means you will get to replace the item lost with a new item at full cost.
If you only have Actual Cash Value then you only get paid for the cost of what it would be to buy a used item.
Be careful, your personal contents add up faster than you think.
Make a video of everything in your home and store it off site.
That way if you have a fire or other disaster you can easily show the claims adjuster what you need to replace.
Loss of Use – Coverage D on the quote.
This is how much the insurance company will pay to house you if you need to leave your house for it to be repaired or rebuilt.
Most companies either provide for up to 12 months or 30% of what the dwelling amount is.
Personal Liability – Coverage E on the quote.
This amount is how much the insurance company will pay to someone who files a claim against you for an incident the say you are responsible for.
For example, someone trips and breaks a hip on your property.
You would be liable for medical costs, lost wages, and pain and suffering.
You want to make sure to have enough coverage so the person will settle and not take you to court.
Medical Payments to Others – Coverage F on the quote.
This is how much will be paid to someone who is hurt on your property to pay for medical expenses if you are not legally liable.
One more layer of protection from someone trying to file a frivolous lawsuit.
This is not coverage for household members.
There are many optional coverages that you can add to your condominium insurance policy.
Here are a few that I recommend.
1. Water/Sewer backup.
This is not covered on most basic homeowner’s policies.
This would cover if the sewer line backed up into your home.
Usually when it happens it can cost several thousands of dollars in damage to your flooring and walls.
I recommend adding at least the minimum $5,000 coverage to your policy.
2. Loss Assessment
Your condo association’s insurance policy will have a large deductible on the policy.
It can range from $5,000 – $25,000. A $10,000 deductible is pretty common.
You, as the condo owner, are responsible to pay the deductible.
The Loss Assessment coverage will pay for the deductible up to the amount you choose for this coverage.
Make sure to find out from your association how much the deductible is or it could cost you big bucks at the time of a major loss to the condo complex.
3. Personal Injury – This covers you for libel/slander.
In the past this was more of a concern for public figures.
Today, with all the social media, everyone should add this.
Comments made on Facebook, Twitter, Linked In, etc. may be seen as defamation by the person or company you are commenting on and they can file a lawsuit.
Lawsuits have been on the rise for this issue recently.
Be especially careful with teenagers.
You are liable for family members in your home too.
4. Scheduled Personal Property
If you have any items that individually are worth $3,000 or more in the categories of jewelry, art, antiques, fur, guns, computers, and collectibles let your agent know.
Most policies have limits for what they will pay out for these categories in the event of a theft.
To schedule the piece, such as a wedding ring set, you would need an appraisal or receipt in the last 3 years.
You pay an additional premium but it insures you will get paid the full value for the item.
You also get the additional protection for “mysterious disappearance”.
So if you lose that piece of jewelry when you are out, you are covered.
If you have smaller pieces but the total of the category is more than what is covered you can also ask to increase the coverage for that category.
Make sure to talk about this with your agent.
5. ID Theft
Most companies offer coverage to help you in the event of ID theft.
It can either be providing the legal services or covering actual losses up to a certain amount.
Here are a few of the major differences between policies that you don’t normally see on the quote sheet.
1. Causes of Loss
Policies vary when it comes to the types of losses they will cover.
Some are very basic and only cover things like lightning, wind, hail, and theft.
Others are more comprehensive and all losses unless specifically excluded from the policy.
This is very important to know.
2. Sub limits
All you see on your quote sheet is the total amount you get for personal property.
Every company has sub limits on many categories when it comes to theft.
The categories include jewelry, art, antiques, guns, computers, furs, and collectibles.
One company may offer $1500 total for jewelry if stolen while another company may offer $10,000 for that category.
This is not something you are aware of when shopping online.
Shopping online may seem easy and cheap but it can cost you thousands of dollars at the time you file a claim if you don’t have the right policy.
When you file a claim and find out you owe thousands, you realize cheaper is not better.
The right coverages matter.
I am here to make sure you get the right policy to protect you and make sure your insurance experience is a happy one.
Sondra Wendt – 623-297-1475
EZ Insurance Solutions