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Avoid Condominium Coverage Mistakes

ci-5Owning a condo puts you in a unique spot in the insurance world. Full on homeowner’s insurance would be overkill, but by the same token, renter’s insurance isn’t sufficient. WiseInsuranceQuotes uncovered some of the things you should remember when purchasing condo coverage and how to avoid condominium coverage mistakes.

1- Know What’s in Your Condo Association Master Policy: Unlike renter’s insurance personal property policies which are largely “one size fits all,” condo policies vary in content and coverage widely because condominium master policies are very much individualized to the facility. Condo association insurance typically covers building exteriors and common areas. However, this insurance – known as the “master policy” – doesn’t cover what’s inside your specific unit. It also may not cover all damages outside your unit.

To know what is and isn’t covered, check the details of your condo policy. Figuring out where the condo association’s master policy ends and your policy begins is the first step in determining how much coverage you’ll need.

Slash Your Home Insurance Premiums. Search for Lower Rates “Generally the way it works is the condo owner’s policy dovetails with the master policy,” says Eric Goldberg, associate general counsel for Washington D.C.-based American Insurance Association. “Where the lines are drawn is dictated by the condo documents.”

According to Goldberg, some condo documents place the coverage dividing line between the middle-part of the exterior wall. This means that everything outside of the exterior wall is covered by the master policy, while everything inside the walls, including plumbing, is covered by the unit owner’s individual policy. In other condominiums, the master policy covers everything from the paint on the inside of your unit to the outside walls of the building. Obviously this can make a huge difference in the property damage coverage that you would need to purchase in a separate policy.

Reading through the condo documents can be difficult. Master polices vary and can be from one to 100 pages in length. Clearly though, the time and effort are worth your, and maybe even your attorney’s time.

2- Make an Accurate Valuation of What You Own: When selecting coverage make certain that you are covered for the replacement cost of your items and not the cash value. The cash value of your new flat screen TV is about $500.00 once you get it mounted and watch a couple episodes of Boardwalk Empire on that bad boy. The premium for replacement cost coverage versus cash value coverage isn’t close to being enough for this to even be a question.

3- Consider Loss-Assessment Insurance: In addition to buying standard homeowners insurance, consider loss-assessment coverage. When you own a condominium, you are a member of the condo association. Along with the other residents, you collectively own the common areas. A common mistake occurs when the condo owner does not understand the legal relationship of the owner of the condo to the association. If a hurricane blows out all of the windows in the common areas or the roof is damaged in a hail storm, you may have to pay portion of the repairs if the condo’s association’s policy doesn’t cover it. Depending on the type of loss, the condo association can go back against the owners of the condo…and everyone would have to pay their part. If the condo association’s loss assessment policy isn’t expansive, you can buy additional loss coverage.