Are you thinking about buying a condo? It is important to remember that condo insurance is different than renters insurance. While your condo association may cover a portion of the building under their own master policy, there are still aspects of your insurance that you need to remember and questions you should ask when making your final decisions.
First, ask for a copy of the condo association’s master policy and insurance by-laws. These contracts will specifically define what you as the unit-owner are responsible for. Contact your insurance representative at Evarts Tremaine to review the by-laws and master policies.
Condominiums typically provide coverage for exterior framing. Many policies will not cover fixtures or enhancements within your condo unit, such as granite or marble countertops, fixtures within the bathroom and kitchen, and flooring. More liberal master policies will cover these extra fixtures and additions in your unit.
Improvements and Alterations
Any improvements, alterations or additions made to your condominium are subject to damage.
Be sure to obtain coverage for any improvements and alterations made to the unit. This includes, but is not limited to, kitchen cabinets, built-in wall units, wall-to-wall carpeting, wallpaper, paint, bathroom fixtures, tile and wood flooring and more.
Unpredictable losses can occur to your property due to burglary, fire, water damage, storm and more.
Personal property, such as furniture, rugs, TVs, stereos, clothes and more may be covered under your basic insurance policy. However, items like jewelry, furs, silverware, antiques, collectibles and other valuables should likely be insured separately.
Additional Living Expenses
Additional living expenses can be incurred if there is damage to your unit due to a fire, storm or other event resulting in your need to live at a temporary residence.
Ensure you have the proper coverage in case you need to live elsewhere for a little while. Coverage usually includes hotel bills, restaurant meals and other living expenses incurred while your residence is being repaired or rebuilt.
Personal and Family Liability
You're responsible if a guest in your unit trips and falls or sustains an injury while on your property or if you cause damage to other units.
Be sure that you have coverage for claims made against you for bodily injury or property damage caused by your negligence, whether intentional or not. This might include damage to other units in the building, perhaps caused by a leaking pipe in your unit or otherwise.
You're responsible if a guest is injured while on your property and you may be required to pay their medical expenses.
Ensure your insurance policy covers this risk. In the event a person is injured in your unit, he or she can submit medical bills to your insurance company. Medical expenses are usually paid without a liability claim being filed against you, with typical limits ranging from $1,000 to $5,000.
If your building owner or association suffers a loss and doesn't have adequate insurance coverage of their own, they may require you to help pay for the loss via an assessment.
Consider loss assessment coverage to protect yourself in the event of an assessment caused either by a property (building) or liability loss. Typical limits range from $5,000 to $50,000.
Physical damage can happen in many ways. As one example, suppose a fire unexpectedly breaks out in the utility closet and consumes the building causing significant damage.
Ensure that your building owner or association carries an all-risk special form to cover the risk of physical damage. Explosion of boilers are typically excluded, so a separate policy must be written to cover that exposure.
What coverages do I need?
1. Building additions and alterations coverage.
This coverage is vital and protects the portion of the building that you are responsible for in the event of a covered loss. Most condo associations are responsible for the exterior walls and fixtures, while the building items from the walls-in are the unit-owners responsibility. Your insurance advisor can help you calculate and determine the appropriate amount of building additions and alterations coverage based on your condo association’s by-laws.
2. Personal property coverage.
This coverage protects your personal belongings and household items. It is important to keep track of your belongings by creating a simple spreadsheet or taking some photos of your contents. Keep both items in an external hard drive or other safe place. In the event of a loss, this helps your insurance adjuster determine what really was damaged or destroyed.
3. Loss assessments coverage.
This can be an overlooked coverage and is typically only available as an addition on your condo policy. Loss assessments coverage provides coverage for certain losses that condo owners can assess all unit owners. For example, if there is damage to a shared property (tennis court, pavilion, etc.) or there is a serious injury on shared property, the condo owner may assess all unit-owners a portion of the damage or claim. Loss assessments coverage would provide the extra coverage needed to ensure you do not have to pay this out of pocket on your own.
4. Water back–up coverage.
Many people tend to think that if they do not have a basement, they do not need water back-up coverage. If your toilet backs up and destroys your bathroom and hallway, this coverage is vital. It is important to protect yourself for all scenarios so that you are not stuck footing the bill.
At Evarts Tremaine, we have many options for your condo insurance. We will evaluate the coverages that you need and compare that coverage amongst multiple companies to ensure that you are getting the best value.