Why Do I Need a Separate Condominium Insurance Policy?

When purchasing a condominium there are a lot of spinning plates to manage. From moving costs to paying for bills, you have to prepare for many things as a new tenant before you even step foot into your new home.

One thing you need to consider in particular before moving into a condominium is condominium insurance. Similar to homeowner’s insurance, it will give you a security blanket of sorts and help to keep your condominium and assets safe.

Today we want to take a deep dive into condominium insurance and talk about how it differs from traditional homeowners’ insurance. There are some key differences between these and some very important factors that condominium insurance cover.

Home Insurance vs Condominium Insurance

The first thing we want to talk about today is the main difference between homeowner’s and condominium insurance. When you own a house you are responsible for every single aspect of it. From the bricks on the outside to your furniture on the inside – you own everything and you are held responsible for it. This is why homeowner’s insurance covers everything from the land to the structure and your contents.

When you rent a condominium from a landlord however, you are only responsible for the interior of the property where your furniture and belongings are. You will be responsible for everything inside the condominium, but you do not have ownership over the exterior or the land it lies on. This is why typically condominium insurance is different to homeowner’s insurance because there is less to consider.

What is Condominium Insurance?

Now that we know the basic differences between home and condominium insurance it is time for us to take a look at condominium insurance in more detail. Condo insurance will typically include some standard coverages that will protect you and your assets from damage or theft. These basic coverages include:

• Personal Liability Coverage  – this covers you if someone gets injured while visiting your condo. If you are at fault due to loose wires or sharp furnishings, it will cover you for the costs of legal expenses and medical bills that your guest may incur.
• Medical Coverage – similar to the last point, if someone is injured in your condo, you can use this type of coverage to pay for medical expenses and this also works if you are not at fault.
• Building Property Protection – this simple form of coverage allows you to pay for repairs and other work in the interior of your condo. It will ensure that any small repairs and jobs that don’t fall under the responsibility of your landlord will be covered.
• Property Coverage – the most common type of condo coverage is for your contents and personal belongings. This will ensure that if your property is damaged or stolen insurance can cover the cost of replacements. There are a few different types of personal property coverage to consider.

When looking at personal property coverage in particular, there are a few different ways you can be paid once this has been used. You can be paid by cash value of your assets; or by replacement cost of these items. The main difference here is that cash value will take into account depreciation of items where replacement cost will not – meaning replacement cost is usually the best value for money of the two.

Condominium Association Coverage

Another thing to consider when researching condo insurance is condo association insurance. This is known by most as the master policy and it will outline what is covered by your condo association itself. Different management companies will have different levels of insurance for their condos and it is important for you to know what is covered before you take out your own policy.

Condo association insurance may cover things such as your boiler, hallways, and shared spaces between you and other condominium residents on site. It is important for you to check and see what type of coverage they offer, as this will determine what your insurance policy needs to cover. Some associations will cover things such as the walls, roof, and fixtures, whereas others might not. It is important to ensure that you are covered for everything possible because you will otherwise suffer the consequences should anything happen.

It is important to know there are many different associations out there, meaning your policy could differ widely from another person you know. Once you read your association’s policy, you will be able to contact a company such as AIA Insure to build your own insurance policy and ensure it covers everything you need.

Extra Coverage

When discussing condominium insurance and deciding what is best for you to take out in terms of coverage – you can consider some extra things. There are some helpful extra coverage you can get such as:

• Loss Assessment Coverage  – this type of coverage will help cover your share of any special assessment issues by your condo association. It will ensure you don’t have to pay should any issues be found.
• Umbrella Insurance – in addition to having personal liability insurance in case of an accident on your property, you can also take out this extra layer of coverage which will help you pay for any costs that go beyond the limit of your liability insurance. This is particularly useful for much larger claims and medical bills.
• Flood Insurance – this is pretty straightforward and helps you to keep your condo safe should there be a natural disaster such as a flood that ends up damaging anything in the condo.

When choosing a condominium insurance policy that works for you, there are plenty of things to consider and these are just some of the basic and additional types of coverage. Make sure to consult with an expert to make sure you have everything you need to protect your condominium.