Condo Owner’s Policy Vs. Condo Association Insurance Policy: Key DifferencesPosted on Jun 19, 2017
Condo owners have different insurance needs than traditional homeowners. In addition to insurance that covers your individual unit and personal possessions, the condo association itself will have an insurance policy.
Some condo owners believe the association’s policy is all they need to protect their investments. Understanding the difference between these two policies can save you a lot of money and heartache if something were to ever happen to your condo.
What is a Condo Association Insurance Policy?
The condo association itself will have an insurance policy. This policy is not what many condo unit owners expect. Misunderstanding about what this policy covers is common because unit owners, whose association dues pay for these policies, don’t often see them.
Condos are different from other homes you may own in that there are elements of the property that are shared among the community. This includes things like hallways, elevators, the building’s exterior, landscaping, community spaces, swimming pools, etc.
The condo’s insurance policy will cover liability for injury to third parties and structural damage for events that happen in these areas or to these areas, but not for liability or structural damage that occurs within your condo unit.
Additionally, most condo insurance policies offer very limited coverage for things like walls, floor coverings, fixtures, etc. within a unit. Some offer coverage for your “bare walls-in,” which includes bare walls, but excludes things like countertops, floor coverings, cabinetry, etc. Others may offer more complete coverage or possibly even less coverage. It’s important to understand the language of your specific condo association’s insurance policy, so you know which gaps in coverage exist and how to compensate for those gaps with your individual condo insurance plan.
Your condo association’s master deed and by-laws spells out exactly whether you or the association is responsible for damage occurring within your unit. You should have received a copy of the master deed and by-laws when you purchased your condo. Giving a copy to your insurance agent is a smart idea since they will have it handy in the event of damage to your unit and they can help you navigate which insurance policy will respond to take care of the damage.
Condo association insurance policies also offer absolutely no coverage for the contents of your condo. This includes things like art, furniture, appliances, clothing, electronics, and other possessions. You will need to invest in a condo owner’s policy in order to get coverage for these types of possession as well as to cover many of the structural features of your condo as well.
Condo Owners Policy
The bottom line is that you cannot rely on your condo association’s insurance policy to tackle repairs to your individual condo unit. Nor can you simply purchase renters insurance to cover the costs of replacing your possessions.
You need to purchase a condo owners or homeowners insurance policy that will provide coverage for your possessions in addition to repairing and replacing the interior of your unit that may be damaged as a result of fire, wind, and other covered events.
This will help you to replace damage to fixtures and upgrades you’ve made to your condo, like hardwood floors, custom cabinets, and even bathroom fixtures that you’ve invested heavily in to add luxury touches to your home. These are things you’ll need to have covered as part of your individual condo insurance policy. Your individual condo owners policy will also cover liability for accidents that occur within your condo unit causing injuries, or if it is discovered that a fire that damages other neighboring condos originated in your unit.
Finding the right balance of coverage between your condo owners policy and your condo association’s insurance policy is much easier when you work with a trusted insurance agency to help you understand your condo association’s responsibility for damage so you can find a policy that complements it perfectly, giving you adequate coverage for whatever comes your way. The better you understand the differences between these two types of coverage, the better prepared you are to protect your investment, the upgrades and improvements you’ve made to your condo unit, your personal property, and your financial interests.