Is Condo Homeowners Insurance Really Necessary?
My Condo Association has a master policy, shouldn’t that take care of my insurance needs? While the simple answer is no, it won’t take care of all of your insurance needs, you need to look at the master policy to see what isn’t covered. By reviewing the master policy first, you can purchase only what you need in a supplemental policy.
Most condo association master policies will primarily cover those structural elements of the building or buildings that are shared. This may include roof, exterior walls and grounds, elevators, subterranean parking and/or basements. master policies will usually have a deductible that is shared by the condo unit owners.
Once you understand the coverage provided by the master policy, you can list those items not covered along with estimated values. Condo homeowners insurance will typically provide coverage for personal property as well as flooring, wall coverings, plumbing fixtures, lighting fixtures and any home improvements made after the initial construction. This list is not intended to be all inclusive and will vary according to your particular situation.
In addition to purchasing a policy that covers those items not covered by the master policy, it is very important to purchase coverage for the risks that are appropriate for your geographic area. Risks may include potential damage from flood, wind, fire, earthquake or vandalism.
Now that you know what needs to be insured and you know the risks for your area that could be potentially damaging to your condo, you need to find a policy that fits you. The most popular policy for condo owners is the HO-6, but don’t assume it automatically provides all the coverage you need, read the fine print.
Another area you need to give serious attention is the company that is going to provide your policy. Doing a little research can go a long way toward preventing major problems should you have to make a claim. Important things to know about the company include how long they have been in business, how long they have been writing condo homeowners insurance and what kind of rating they have with A. M. Best.
Master policies don’t cover everything and your home is usually the largest investment you will make. This is not the place to take chances. Make sure you have the right coverage and the right company to take care of your needs.