Condominium owners often have questions about the proper insurance coverage for their home. It’s a bit confusing when part of the building is insured as an entire structure, yet the owner is responsible for their own space and belongings. Whereas a traditional home is normally covered with homeowner’s insurance, a condo is usually covered with condominium insurance.
A condominium’s association insurance typically covers the building, commonly owned property and liability for the association. In many cases that policy is restrictive to the point of not covering break-ins, injuries caused by the structure inside your space or even water damage to the inside of the walls.
Condominium policies applied specifically to the unit can provide coverage for everything inside the unit as well as most natural disasters and injury liability. We say "most” natural disasters because there are often special policies required for a certain geographic area...flood insurance is more expensive (and sometimes required) next to the river.
There are some basic steps you can take to ensure the right insurance on your condo.
Check your association’s master policy. It will detail what’s covered and what’s not. Then, you can tailor your personal policy to safeguard what the master policy doesn’t.
How much is the right coverage amount? It’s tough to estimate what replacement counter tops or cabinets might run. A home store website often shows pricing for these items or your agent can often provide an actuarial estimate based on previous cases. Some suggest asking other homeowners what they paid for their upgrades on similar items, but that conversation might be considered invasive. Minnesota politeness, ya know.
Make sure you have coverage for contents AND structure. What’s the difference? Imagine tipping your condo upside down. Everything that falls out is content. Flooring, carpeting and light fixtures are part of the structure even if you put them in yourself. Again, check the master policy to see how far its structure coverage goes.
In a general sense of financial protection, check your association’s deductible. A group of 10 owners means each is responsible for 1/10 of the deductible. Some policies carry a $50,000 deductible. Ouch. Consult an agent to see how much of the association’s deductible can be covered by your own policy.
Neighbors will often recommend an agent if you ask about their experience. The main thing is that you ask. Ask your neighbor. Ask your agent. Insurance only works when you ensure proper coverage.