Condo Insurance

The Walters Agency

The Walters Agency

A condo insurance policy is a type of coverage furnished especially for condominium owners. It covers both personal property and liability protection.

When choosing a policy, the tenant needs to consider the condominium association's master policy and rules. Generally, the association will insure the entire property as either "bare walls" or "single entity". "Bare walls" means that there is no responsibility on the part of the association for anything inside the unit. On the other hand, "single entity" indicates that certain fixtures inside the condo will be covered. The common areas of the rest of the condominium complex are covered under a shared policy that is financed by monthly dues collected from the owners of each unit.

Choices of coverage include cash-value or replacement-cost. Making a distinction between these two types of coverage can mean a difference of thousands of dollars. Cash-value simply means covering the cost of an item, when it was purchased, and then calculating depreciation. Whereas replacement-cost involves figuring the current cost of an item purchased brand-new today and then subtracting the depreciation value.

Deciding to cover contents and structure is very important. Examples of contents are furniture, electronics and jewelry. Structure would be cabinets, carpeting and lighting.

Two of the major benefits of condo insurance include loss of use and guest medical payments. This means that if your residence becomes uninhabitable, additional living expenses will be covered. Also, if a guest should suffer an injury, medical payments will be covered.

In order to figure out how much coverage is needed, a detailed inventory of personal property is necessary. Once the property is inventoried, the insured should completely understand exactly what their policy covers. The association's master policy coverage should be documented as well. A review is in order at least once a year to ensure that all possessions are adequately covered.