Is Your Home a Safe Haven?
If you are considering buying or have just bought a condo, you may be surprised to know just how different condo insurance is from standard homeowner's insurance.
The differences between a condo and a home are fairly obvious, but there are a few important aspects to consider.
Owning a condo may mean that you are, as part of the community inside the condo complex, part owner in the commons areas.
Although many condominiums have their own insurance policy that your dues may help fund, it is possible additional coverage may be required as part of your individual condo's insurance policy.
Looking at your master policy is the first place to start.
When you purchase a condo you will receive a copy of the master policy, which is the policy that is paid for with your membership dues.
Your master policy will clearly outline what is not covered by the association, and these items will need to be included in your personal policy.
It is very important to pay attention to what the condo association has listed for a deductible.
In the unlikely event of a disaster, you will have to split the deductible with the other condo owners.
Depending on the size of your community, this could be as little as a few thousand dollars, or upwards of $50,000.
If the deductible is unreasonable, you will want to talk to your private insurer for options that can help protect you from financial ruin should a claim have to be made by the association.
One of the common things that condo owners forget to think about is water damage.
Not all policies will cover your damages and loss in the event another condo in your building is the cause of your claim.
Flood and wind coverage may also cost extra, but depending on your location may be a worthwhile investment to make.
When you consider insurance to cover your assets inside of your condo, you will have to choose between two types of coverage.
A cash value insurance plan may be a cheaper option, but the implications of such a plan need to be given consideration.
With the cash value option you are paid the value of the items damaged, minus any depreciation.
If you have computers or other forms of technology, this could make replacement difficult due to the depreciation on these types of items.
The better, yet often more costly, option is replacement cost policies.
With a replacement cost policy you are given the actual cost of replacement.
For example, if your laptop is several years old, your replacement value would be the cost of a new laptop, whereas with the cash value you would receive the cost of the new laptop minus two years of depreciation, which can be a significant loss.
While the process of insuring a condo may not be as cut and dry as a traditional home, finding the right agent to serve your needs will make it much easier to understand.
The differences between a condo and a home are fairly obvious, but there are a few important aspects to consider.
Owning a condo may mean that you are, as part of the community inside the condo complex, part owner in the commons areas.
Although many condominiums have their own insurance policy that your dues may help fund, it is possible additional coverage may be required as part of your individual condo's insurance policy.
Looking at your master policy is the first place to start.
When you purchase a condo you will receive a copy of the master policy, which is the policy that is paid for with your membership dues.
Your master policy will clearly outline what is not covered by the association, and these items will need to be included in your personal policy.
It is very important to pay attention to what the condo association has listed for a deductible.
In the unlikely event of a disaster, you will have to split the deductible with the other condo owners.
Depending on the size of your community, this could be as little as a few thousand dollars, or upwards of $50,000.
If the deductible is unreasonable, you will want to talk to your private insurer for options that can help protect you from financial ruin should a claim have to be made by the association.
One of the common things that condo owners forget to think about is water damage.
Not all policies will cover your damages and loss in the event another condo in your building is the cause of your claim.
Flood and wind coverage may also cost extra, but depending on your location may be a worthwhile investment to make.
When you consider insurance to cover your assets inside of your condo, you will have to choose between two types of coverage.
A cash value insurance plan may be a cheaper option, but the implications of such a plan need to be given consideration.
With the cash value option you are paid the value of the items damaged, minus any depreciation.
If you have computers or other forms of technology, this could make replacement difficult due to the depreciation on these types of items.
The better, yet often more costly, option is replacement cost policies.
With a replacement cost policy you are given the actual cost of replacement.
For example, if your laptop is several years old, your replacement value would be the cost of a new laptop, whereas with the cash value you would receive the cost of the new laptop minus two years of depreciation, which can be a significant loss.
While the process of insuring a condo may not be as cut and dry as a traditional home, finding the right agent to serve your needs will make it much easier to understand.
