Insuring a condominium (condo) is much different than insuring a home.Â When insuring a home, you must take into account the structure of the home, contents, lot and any other structures contained therein.Â A condo is different because in most cases you do not own the property it is on or in some cases the physical structure.Â With most condos, a master policy is set up by your association dues which cover the structures within the community.Â Before you decide how much individual coverage you will need, you should review the associationâ€™s master policy to see what it covers. There are two main types of master policies.
- Bare walls in.Â These policies cover all real property from the exterior framing inward, but do not cover fixtures or installations within a condo unit. Features such as countertops, bathroom and kitchen fixtures, and flooring are not covered. If your condo association has this kind of master policy, you’ll probably have a greater need for individual coverage.
- All in.Â These policies cover fixtures, installations or additions within the interior surfaces of the perimeter walls, floors and ceilings of individual units. Condo owners under an all-in plan will probably have a more limited need for individual coverage.
There are also variations of the two types. These details should be spelled out in a condominium association’s bylaws.
Once you determine the master policy coverageâ€™s, you are ready to figure out how much coverage to purchase.Â To determine how much coverage to buy, you will need to figure out the replacement value of structures and fixtures (if not covered by the master policy) and the replacement value of your belongings.Â In some cases you may need to determine if you want the cash value or the replacement cost of an item.Â Cash value will pay you the current value of the item minus the depreciation costs.Â Replacement value will pay you the amount it costs to replace the item.
Other coverageâ€™s you may need to purchase additional to your condo insurance could be wind, flood and earthquake policies, depending on what area of the country you reside in.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.