Condo living is great for many people, but like any home, you need to make sure you have the right insurance. While your condo association may have some coverage, most of what happens to your unit is up to you to protect.
What Does Your Condo Association Cover?
Just like with general maintenance, your condo association typically insures everything outside of your unit. That includes the roof, exterior structure of the building, and common areas. Your condo association also likely has liability coverage for incidents that happen in common areas, but there may be rules that require you to carry coverage for your guests. Check with your condo association to see what type of coverage they carry.
What Does the Condo Owner Cover?
As the condo owner, you need to cover the interior of your unit. That includes your appliances, personal belongings, and interior finishings like drywall and carpeting. There are sometimes gray areas where your condo association’s insurance may cover things like permanent fixtures that may not be covered in other buildings. It’s important to understand your condo association’s specific policy when you’re buying coverage.
Do You Have to Buy Condo Insurance?
Your condo association may require you to buy condo insurance to protect others from incidents you may be liable for and to guarantee that you can repair your unit and preserve the value of the building. If you have a mortgage on your condo, the lender will typically require you to carry insurance to guarantee that the loan will be paid off even if a disaster destroys your condo.
What if You Rent a Condo or Rent Out a Condo?
Condo insurance is generally for the owner of a condo living in the unit. If you’re renting a condo, you need renter’s insurance. If you’re the owner, you may need landlord insurance. Before renting out your condo, always check whether your current condo insurance will apply and if there are limits to how long you can rent out your condo.
What Does Condo Insurance Cover?
Assuming you’ve selected the right options, condo insurance will typically cover the following types of incidents.
- Weather such as lightning and heavy winds
- Water damage from interior sources
- Smoke from other units
Condo insurance typically won’t cover floods and earthquakes. Flood or earthquake coverage requires a separate policy.
What About Special Assessments?
Special assessments are generally not covered by condo insurance. This is especially true for things like routine maintenance and repairs. For example, if your condo association didn’t build up enough reserves for a scheduled roof replacement, your insurance won’t help you to pay that assessment.
Some condo insurance policies do pay for special assessments that come from covered claims. For example, if a windstorm damaged the roof and the damage exceeded the condo association’s insurance limit, your policy may pay for the resulting special assessment.
How Much Condo Insurance Do You Need?
When you buy condo insurance, the coverage for your unit is generally determined by the value of the unit and its construction type. You may need to choose specific options based on what kind of coverage your association has for the building.
Your personal property coverage should be equal to the value of your belongings. If you have $20,000 worth of stuff, you probably want a $20,000 limit to be able to replace it. As a default, you’ll usually only get paid for the used value, but many policies allow you to add new cost replacement coverage so you can buy new instead. Certain items, especially jewelry and electronics, may have lower limits and require special coverage if you want to be fully covered.
For liability, your main concern is protecting your condo itself and your other assets from lawsuits. You may want coverage at least equal to your net worth and possibly more if you’re still working.
Does Condo Insurance Cover Loss of Use?
Loss of use is optional coverage. If you need to temporarily or permanently move out due to covered damage to your condo, loss of use will pay for your lodging, moving expenses, and other covered incidental expenses.
What if Your Condo Association Offers Coverage to Owners?
Some condo associations may give owners the option to buy condo insurance through the association or its preferred insurance company. For example, they may have organized a bulk discount. You should evaluate this type of offer the same as you would if you were buying from any other source both to make sure that it meets your needs and gives you a reasonable price.
If your condo association has insurance for owners that you can’t opt-out of, you can still buy additional coverage to fill any gaps or to increase your protection.
How Much Does Condo Insurance Cost?
Because your condo association carries insurance on the building, condo insurance will typically be much less expensive than home insurance and slightly above the cost of renter’s insurance. Your cost depends on where you live, the age and construction of your building, your claims history, and your coverage options. You may also be able to receive discounts for things like bundling with your car insurance.
Start Your Quote
Your independent insurance agent can help you figure out exactly what coverage you need and help you get quotes from multiple insurance companies all at once. If you’re near Janesville, WI, contact Adam Johnston Insurance to get started.