Condominium insurance – Some facts

Condominium insurance is quite different from home insurance. If you are staying in a condominium, you need to get a special Ho-6 Insurance to protect your condo. Many of you may not know how much insurance would be enough for you. The best way to find out is to make a list of all those things that you want to protect in your condo. Your condominium insurance policy: A condominium insurance policy typically covers your unit. You may not be responsible for the entire association, but you along with other unit owners are definitely responsible for the common areas in the association that all of you use. Hence, there is a natural responsibility that you have towards it. The association owner may demand a fixed sum of money required to cover the common areas that you use along with the other members of the different units in that association. Condominium insurance has 2 broad categories:

1. Bare walls in: It covers the exterior property and leaves out the fixtures and installations (if any).
2. All in: Covers everything that is inside your condominium unit. These include – floors, ceilings, walls and any interior surfaces.

Is there a deductible? There is usually an association deductible for the commonly shared building and the commonly used areas. The policy usually mentions that in the event of a natural disaster, when the condo needs major repair work, the claim will be put forth to the commercial insurance provider for the association and there would be coverage for the loss. How much condo insurance do you need? This actually depends on what all inside the condo do you want to insure. In case of a disaster, the loss that you would incur could also be calculated in order to get a fair idea of the amount of insurance you would need. What kind of coverage would you buy? After having decided what to cover, you now need to decide what coverage to buy. Your choice would revolve around:

• Cash value – Provides the depreciated value of content.
• Replacement cost – Provides what is required to simply replace content.

Condominium insurance needs to be chosen with care. Contents in condominium insurance are insured separately. Many condo owners may think that if the owner of the association has insurance, then they are covered. The truth is that nothing is available free of charge. You need to buy your own insurance if you want to protect your own unit. The insurance owned by the association would only cover the structure of the association and nothing more. So protect your own unit and stay insured.