Condo Homeowners Insurance FAQs

Condo Homeowners Insurance FAQs  Insurance, while always a nuanced topic, becomes especially confusing when it comes to condo homeowners insurance. If you own property, then you are responsible for insuring it – that makes sense. But when it comes to condos, it can be hard to tell who is on the hook for what. In thinking about what types of homeowners insurance areavailable for condos, here are some of the most popular questions that continue to come up.

 

Is condo homeowners insurance mandatory?  As the insurance comparison and shopping platform CoverHound puts it, homeowners insurance for condos ismandatory if you have a mortgage on your condo. If you own the property outright however, you’re free to do as you please. It’s when you’re receiving financial assistance from a third party (in this case a mortgage via bank) that they require insurance as a way of protecting their financial investment in you. 

 

What am I responsible for? You only need to account for your personal belongings in a condo homeowners policy, and any interior structural parts not covered by the association master policy, according to Fox Business

 

OK, so which interior parts am I responsible for and which is the association responsible for?  Jack Hunglemann of Fox Business breaks it down further, stating that a condo owner won’t find any of this information in the master policy like one would think, but rather “on a page in the condo association documents, usually called the declaration.” This declaration will outline both what the association and you as the owner are required to insure. 

 

So anything outside the walls isn’t my responsibility? This is correct. The condo association is responsible for covering anything outside of your condo walls. 

 

Why is condo homeowners insurance important? Well, as is the case with all types of insurance, condo homeowners insurance will protect you and your things, in addition to providing liability coverage in the case somebody is hurt in your condo. Condo homeowners insurance is important if you want to protect your financial future. In no case is it more economical to go without condo homeowners insurance. Even if you had a big stack of money you didn’t need, why would you risk losing itversus paying a smaller monthly amount that would save you a lot of headache in a worst-case scenario?

 What’s a master policy?  According to CoverHound, a master policy is within the condo association policy, and splits between a “Bare Walls-in” coverage – which covers all real property (belongings) from the outside in – and an “All-in” coverage – which covers installations, fixtures (i.e. wood flooring, granite countertops, crown molding, etc.) and any additions within the interior. However, the specific things covered within these types can and do differ from condo association to condo association. 

 

Can you breakdown the difference between actual cash value coverage and replacement cost coverage?  Actual cash value is more affordable to insure, but will only get you the current, actual cash value of the belongings needing to be replaced. Replacement cost coverage, as outlined by BankRate, doesn’t take depreciation into account and will pay whatever it costs to replace the item(s) in today’s market. Even if the replacement cost is thousands of dollars more than the item was appraised at, it’ll still be covered.  

 

Condo homeowners insurance is arguably the trickiest type of insurance out there. Due to the intricate nature of policy details and the non-uniformity of what each condo does and does not cover, you have to take extra caution in making sure you have all the details. At the end of the day, you have nobody to blame but yourself if you’ve opted for a coverage that doesn’t protect you how you want it to.  

Tags: homeowners policy, Homeowners Association, Condo, Homeowners, Homeowners Insurance, LA Splash, GOT Anchored Online, Diversity News Magazine, Protect Your Home, Financial future, Photo Credit: F Images, Sources: Diversity News

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