Condos, which are short for condominiums, are considered as a lucrative investment option because they can be rented out to earn money in return. However, many owners are unaware of the importance of condo insurance in protecting their investment. If you own a condo or are planning to buy one, make sure you know all the basics of condo insurance so that you can secure your investment.
What Is Condo Insurance?
Needless to say, condo insurance is an insurance plan that is offered especially for a condominium. Similar to home insurance, condo insurance covers the entire area within your condo boundaries, but since the external area falls under the jurisdiction of your condo association, that region will not be covered in your insurance policy. It will instead be considered in the association’s insurance policy.
Condo insurance is also known as an HO-6 insurance policy because that is the reference used for application forms for condo insurance.
Types of Condo Association Insurance
Because the common areas in a condominium complex are jointly owned by all the individual condo owners, the ‘association of owners’ often purchase an insurance plan to cover these ‘public’ areas. This is referred to as the Master Policy or condo association insurance and usually provides coverage for areas such as hallways, lobby, exterior walls, and the likes.
There are two basic types of condo association master insurance policies that owners can decide to choose from.
1. All-In Condo Master Policy
This type of condo insurance is also called ‘single-unit’ master policy, ‘all-inclusive’ insurance or ‘all-in’ coverage.
It includes all the real property in the condominium complex, which means that it covers the fixtures in your condo as well.
For instance, wiring, plumbing, appliances, and carpets are covered under this master policy. Note that this still does not include any of your personal property or personal belongings that you place or install in your condo.
2. Bare Walls-In Condo Master Policy
Being the exact opposite of the all-in condo master policy, a bare wall-in policy rarely covers anything within the individual condos. For instance, bare walls-in means that the plumbing, wiring and so on, may or may not be covered.
When Should You Consider Getting Condo Insurance?
Condo insurance is a must-have if your complex has a bare walls-in master policy.
However, even if the condo association has an all-in master policy that covers the items originally found in your condo, it is better to purchase a comprehensive condo insurance plan that encompasses all your belongings and keeps you protected from any and all harm that might come your way.
What Should Your Condo Insurance Cover?
For additional safety and protection, you should purchase a condo insurance plan that covers the loss and damage to your personal possessions, provides medical payments as well as offer protection for personal liabilities.
The losses covered by condo insurance consists of damages caused by fire, strong winds, hailstorms, theft and some other unfavorable incidents such as acts of vandalism, pipe leakages, bursting pipes and damages incurred by lightning.
If you have an array of expensive or luxurious items such as jewellery, artwork, sculptures or other valuable possessions, then make sure to purchase further coverage accordingly.
What Is the Importance of Condo Insurance?
Condo insurance ensures that you have help and assistance readily available in case a calamity strikes or you face any adverse times.
Besides saving you from the financial costs incurred in lawsuits and liability claims, condo insurance is needed to help you recover from any damages sustained by your property.
Now that you know the basics of condo insurance, make sure to consult the relevant personnel and purchase a comprehensive condo insurance plan that works best for you.