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It’s no secret that owning a condominium is different than owning a free-standing house.  Unlike owning a house, condo owners share walls, utility systems, and community spaces. Therefore, purchasing condominium insurance is quite different than homeowners insurance.  For a deeper look into the basics of condo insurance, read our blog Why Do I Need Condo Insurance: Understanding What Isn’t Covered by Your Association’s Master Insurance Policy.

When disaster strikes, the last thing you want to be faced with are unexpected insurance costs or lack of coverage.  Here are five essential questions to ask to make sure your condo insurance policy fully covers your home.

1. What Does the Master Policy Cover?

Because of the shared property in a condominium complex, all of the individual unit owners have a shared responsibility to protect the complex.  This generally takes the form of a “master insurance policy,” which is separate from the individual condo insurance policies purchased by each owner.

Master policies can very greatly on what they cover, which significantly impacts the amount of coverage each individual owner needs within their own units.  Some policies stop their coverage at the drywall of your unit, while others cover flooring and fixtures.  Read the master policy carefully when choosing a condo insurance policy, and if you don’t thoroughly understand the details of the policy, bring a copy with you when you come to see your insurance professional.

2. What Is the Master Policy Deductible?

Just like with auto insurance, the condominium master insurance policy comes with a deductible.  This means that if a claim is made, there is an amount that the policy holders pay before their coverage kicks in.  While at one time deductibles were, on average, relatively low, there has been a shift towards policies with higher deductibles in order to lower the monthly premiums.  Understanding that cost and how it is split between each owner is necessary, so you can be prepared.

3. What Coverage Do I Need?

Now that you understand the complex’s master policy, it is time to consider how much coverage you need to be protected.  The amount of coverage will depend upon the contents of the condo, any upgrades you have made, and what is covered by other policies.  Your insurance professional can help you balance the coverage with the cost.

It is also essential to weigh cash-value coverage against replace-cost coverage.  Cash-value cost will provide coverage of items minus depreciation.  This means, a claim for the computer you purchased three years ago will result in a lower reimbursement than what you actually paid for it, since it has three years of aging and use under its belt.  On the other hand, just as it sounds, replacement-cost coverage provides the amount of coverage it would take to replace the three-year-old computer with a new model.

4. Have I Covered the Contents and the Structure?

When purchasing a condo insurance policy, discuss with your insurance professional whether you are fully covered for the contents and the structure.  The contents of your condo would include the furniture, clothing, electronics, jewelry, etc.  The structural items would include flooring, cabinetry, countertops, lighting, etc.  Make sure the amount of coverage you choose takes both into account.

5. Am I Covered for Flood and Wind Damage?

Flood insurance is most often sold separately than homeowners insurance or condominium insurance.  To be sure your condominium complex is covered, inquire about your flood insurance in addition to your master policy.

Separate from your complex’s flood insurance policy, you may want to consider a private flood insurance policy for your specific unit.  After all, similar to the general master insurance policy, the master flood insurance policy will likely not cover the contents of your unit.

Finding the Right Amount Of Coverage

The insurance professionals at BenefitSource understand the complex issues surrounding your condo insurance policy.  Let us work with you and your association to determine what type of coverage fits with your unique needs.  Call us directly at (877) 215-5431 or email us to set up your appointment.

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