Condo Insurance

It’s important to read the Covenants, Conditions & Restrictions (CC&Rs) of your Condo Association to be clear you understand who owns what part of the property so that you know what parts are your responsibility to insure on your own. The condo policy provides walls-in coverage, protecting your individual unit, assuming the Master Association’s Policy covers the structure itself. Be sure you’re clear on where that ownership division line lies.

What is covered by a Condo Unit Owner’s insurance policy?

There are two main parts to a homeowner’s insurance policy. Whether you have a homeowner’s, renter’s, condo, or rental home policy, they all have these same two sections.

PART I:  PROPERTY

• Walls-In – Dwelling Property
  Condo insurance building property coverage protects the interior of your unit, which includes the floor, interior walls, cabinetry, sinks, tiling and any other permanent fixtures.  When damage affects more than one area of a condo, understanding the division of ownership between the condo owner and the condo association is even more important. Depending on what areas are affected, one claim might be covered by more than one policy at the same time. When choosing your walls-in dwellling coverage limit, consider the value of any new fixtures or cabinetry, and the cost of labor to repair and replace such.
  
  

• Contents – Personal Property
  Your personal belongings are covered if they are stolen or damaged in a covered loss. If you have any high value items such as jewelry, art, camera equipment, musical instruments, or firearms, be sure you discuss scheduling these items on your policy. Most policies have sublimits for valuable items over a certain limit such as $2,500 per item for example. Scheduling items can have other benefits to you as well, such as waiving your deductible.
  
  If your personal property is stolen as a result of a car break-in, this is where the coverage is found. Damage done to the car is covered under the auto policy, and your stolen personal belongings are covered under the home insurance policy.
  
  

• Loss of Use – Additional Living Expense
  This part of the policy will pay for additional costs that you incur when it is necessary to live away from your condo due to damage from a covered cause of loss, such as a fire. This helps pay a hotel and other temporary living expenses while your condo is being repaired.
  
  

PART II: LIABILITY

• Personal Liability
  This provides defense and pays legal expenses if you, your family members, or your pets unintentionally injure someone or damage other people’s property. Typical limits available are $100,000, $300,000, and $500,000. Personal liability coverage applies even when you’re away from the home. Claims examples could include: Your guest slips on an icy sidewalk or trips down the stairs due to a loose railing, your dog bites someone, or your teenager accidentally injures and infant while babysitting them.
  
  *Consider a Personal Umbrella (link) policy to add another layer of protection from these types of lawsuits.
  
  

• Medical Payments
  This covers medical payments for a guest who becomes injured in your home, regardless of fault.
  
  

• Common or Shared Areas
  Typically the common shared areas on the property have liability coverage provided under the Master Policy.

Additional Coverages to Consider

Most condo insurance policies have the same basic structure as outlined above, however, there are some coverages that may need to be endorsed or added onto the policy, such as those listed here.

Do you work from home or have a home-based business? 

Be sure you review the sub-limit of property coverage available on your condo policy when that equipment is used for your business, and consider purchasing an in-home business insurance policy to be more adequately insured.

Loss Assessment: Do you know the deductible for your Master Condo Association’s insurance policy?

It’s not uncommon for the Master Policy to have a high deductible, such as $25,000 or $50,000. Loss Assessment coverage can be added to a condo insurance policy. It covers situations in which the unit owners in a condominium are financially responsible for a shared loss, so long as the issue was a covered peril. For example, a fire in the common areas causes damages that are above the limit set aside in the association’s budget, and/or are less than the high deductible on the Master Policy, so the cost is allocated to each unit owner. This coverage helps handle that cost.

Do you have property in a storage unit, possibly from downsizing or having recently moved?  

Your condo insurance policy provides coverage for this, up to a certain limit, so you most likely don’t need to purchase additional insurance from the storage facility.

Water / Sewer Backup Coverage 

This coverage is not always included, so check to see if it’s there, and choose a limit appropriate to your needs. While the insurance does not pay to replace the sewer line or any of the pluming, it does cover the damage caused by the backup, which can be extensive and costly.

Identity Theft Coverage

Some policies have this coverage built in, and others require it be added.

Flood Insurance 

If your home is damaged as the result of a flood, your home insurance policy does not cover the damage. You need a separate flood policy for this type of loss.

Earthquake Insurance 

If your home is damaged as the result of an earthquake, your home insurance policy does not cover the damage. You need an earthquake policy for this type of loss.

Personal Injury

Do you have kids who use social media? Check to see if this coverage is included. Cyber bullying and libel are claims that come up more now that social media is so prevalent in society.

Valuable Items

If you have any jewelry, fine art, rugs, expensive hobby equipment, firearms, silverware or other collectables that may be high in value, you may want to consider scheduling or listing them specifically on your home or renter’s insurance policy since most policies have sublimits for these types of items. In addition to the sublimits that may be too low, scheduling the items can be a way to eliminate the deductible for those items at the time of a loss. Depending on the value of the item, an appraisal may be required.