Nearly all condos are part of an association that has an insurance policy in place for the physical structure. Typically, the policy only covers building exteriors and common areas. However, the furniture and items inside your unit are not covered.
What Does Your Condo Association Policy Cover?
Before deciding on the coverage, you need, review your condo association master policy. It is important to understand where the association policy ends, and your individual coverage begins. Generally, there are three different kinds of condo association policies.
- All-in and all-inclusive. All condos exterior and interior surfaces, including fixtures, installations and additions are covered. You will still need a policy to cover your personal property.
- Special entity. This is like the all-inclusive policy, except that fixtures, improvements, and additions are not covered. For example, if you remodel your bathroom, the fixtures and improvements wouldn’t be covered by the master policy. As above, you will also need to make sure your personal property is covered.
- Bare walls-in and wall studs-in. The least amount of coverage because only the bare structure is insured. You will need to have a policy that protects your condo’s interior, including your personal property. Think in terms of a total loss. Estimate the cost to replace everything, including the plumbing, electrical, drywall and paint.
Condo Insurance
A condo insurance policy covering an individual unit is a called an “H06 Policy.” H06 protects your condo and covers damage to interior walls, floor, and ceilings caused by:
- Theft
- Vandalism
- Smoke damage
- Frozen pipes
- Fire
- Weather
Notable Exclusions
Note that flood, earthquake, and sinkhole damage is not listed and may not be covered by many H06 policies. If you want flood, earthquake, or sinkhole protection, talk to your insurance professional.
H06 Condo Coverage Basics
Ask your agent about your H06 policy and whether it covers “all perils” (most comprehensive) or “named perils” (not as comprehensive).
An H06 policy usually protects you against a liability claim if someone is injured in your unit. Coverage generally ranges from $100,000 to $1,000,000, so make sure you select the appropriate limit for your situation. Keep in mind that your liability coverage includes libel and slander protection, too.
H06 policies also cover your personal belongings. Personal belongings are generally defined as anything you can take with you if you move. Make sure to value your possessions properly. Consider what those items would cost if you had to replace them now, not their purchase price.
Coverage Options for Your Condo Policy
There are differences between what your H06 policy covers and what your condo association’s master policy covers. Then create a policy that covers the gaps.
- Personal umbrella
Extend liability coverage above your condo and auto policies for even more protection.
- Loss of use
If your condo is uninhabitable because of damage from a covered incident (like a fire), loss of use coverage helps to reimburse your cost to live elsewhere.
- Sewer backup
If sewage backs up from the pipes and into your condo, you’ll need sewage backup.
- Flood
If water flows into your condo, you will need a separate flood insurance policy. Keep in mind that most floods happen outside of flood zones.
- Earthquake
If the earth moves and causes damage to your condo, you will need earthquake insurance. This is not customarily included on an H06 policy. You will need to discuss this with an agent.
- Loss assessment coverage
Loss assessment coverage (or unit assessment coverage) will help you pay for covered condo association-related incidents that occur in common areas. If the claim exceeds the condo association’s policy limits, the condo owners might end up paying the difference as a special assessment.
You Are More Than Just a Policy to Clyde Paul Agency.
Choosing how much coverage you need can be difficult. At Clyde Paul Agency, we value the relationships we have with each client. We work with you to provide competitive pricing and customized protection for your unique needs. Contact us today for an insurance proposal.
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