Condo Insurance Overview
Condominium insurance is for those who own a condo home. It has some important differences from traditional homeowners’ insurance, just like the condo dwellings themselves are different from your typical single-family home. The condo association or HOA will have its own insurance that protects its members. It is important to know the extent of coverage you have on the building’s association policy when looking to purchase the additional protection of condo insurance. With HOA coverage, protection usually ends just beyond the exterior walls. You are then responsible for the interior walls, fixtures and appliances, cabinetry, and your personal belongings. The HOA basically protects the association from liability for accident or injury but is not intended to protect the individual unit owners.
What is Condo Coverage?
Good condo insurance is designed to protect you, the condo owner, from various possible losses not covered by the HOA insurance. In a situation where the condo homeowner (but not all members of the HOA) is found liable for some kind of loss, this is the kind of policy that will help. For instance, if a fire were to break out in your unit but also damaged your neighbor’s unit, this insurance will protect you. Keep in mind that most mortgage lenders for condos will mandate that the owners buy a minimum amount of coverage, which will likely include liability and repair or replacement coverage.
How Condo Owner Insurance Functions
Condo insurance protects the condo owner from losses due to wind, fire, theft, some forms of water damage and other potential losses. Should you face a loss, you would then file a claim with both your condo insurance provider and the HOA’s company as well. This is due to the fact that some claims will likely include damage to both interior and exterior areas. Remember that these policies don’t usually cover major flooding and earthquake damage.
Types of Policies
There is the “all-in” policy for individual condos, which covers just about everything inside the unit, including personal items and also liability for injury or accident that might occur within the unit as well. A “bare walls” policy covers what is outside of the unit, including the exterior walls, but nothing that is within the condo walls. This is generally what your HOA carries.
One can see how important the benefits of condo insurance are. You get liability protection and protection from damage or theft of any personally owned property. You will also receive certain other protections from loss or liability should you be away from your condo home.