If you’re buying a condo for the first time, you need to know what type of insurance coverage to carry. It’s a little different than home insurance and this article is designed to give you some basic knowledge of condo insurance and how it works.
As the owner of a condominium, you will need to have your own personal insurance policy that provides coverage for your personal possessions, structural improvements to your apartment and additional living expenses if you are the victim of fire, theft or another disaster listed in your policy. Your own insurance policy also provides you with liability protection.
A Master Policy
Unlike the personal policy, the condo/co-op board provides a master policy. This covers the common areas you share with others in your building like the roof, basement, elevator, boiler and walkways for both liability and physical damage. If you are involved on the condo association board, be sure to get several quotes before you buy, as prices can vary widely across insurance companies. Getting more than one quote is critical.
Tips for buying condo insurance
1. Read the fine print
In order to make sure you’re not either under or over insured, determine exactly what is covered by your individual policy (this way you are only insuring those things that actually need to be covered). Sometimes the association is responsible for insuring the individual condo or co-op units, as they were originally built. If there have been any alterations, you are responsible for insuring those.
2. Ask about unit or loss assessment coverage
This reimburses you for your share of an assessment charged to all unit owners as a result of a covered loss. If, for example, there is a fire in the lobby, all the unit owners are charged the cost of repairing the loss, but having unit assessment coverage will reimburse you for this unexpected expense.
3. Save with a higher deductible
Be sure to get the highest deductible you can live with. The amount of money you’ll save from choosing a high deductible now will more than make up for the cash you’ll shell out if anything happens later.
4. Additional coverage for expensive items
If you own expensive jewelry, furs or collectibles, you might consider getting additional coverage since there is generally a $1,000 to $2,000 limit for theft of jewelry on a standard policy.
Safety discounts may be available if you have or install smoke detectors, alarm systems, deadbolt locks, closed-circuit television, a secured-entry system or a doorman. Also ask about group discounts if you insure your unit with the same company that underwrites your building’s insurance policy. You could also qualify for a multi-line discount.
Hopefully you will find the information listed here helpful when the time comes to purchase condo insurance. For more information about Massachusetts Condo Insurance visit Farquhar and Black Insurance Agency.