Condo Insurance Questions

Condominium owners have unique insurance needs.

Homeowner insurance provides a safety net should a catastrophic loss occur to the property. Condominium owners face their own perils that demands insurance designed for these unique risks. Understanding what perils lurk in the shadows is necessary to ensure adequate insurance is maintained.

My Condo Board Purchases Insurance--is That Enough?

A condominium master policy protects only the structure, common areas and equipment such as elevators. Condo owners must purchase insurance for their unit, including any betterments the tenant has made, such as upgraded kitchen appliances, carpets and built-in cabinetry. Condo owners should purchase adequate insurance to rebuild or replace all the additions and alterations made to their unit.

What is Loss Assessment?

When common property is damaged and the master condo policy does not respond, or the loss exceeds coverage limits, the cost to repair or replace the item is assigned to individual condo owners. Loss assessment coverage responds by paying the portion of the loss assigned to the condo policyholder. This coverage is important, because a damaged elevator or swimming pool can be extremely expensive.

How Much Contents Coverage Do I Need?

Condo owners should ensure they have enough coverage to replace all the property in their unit. Many insureds drastically underestimate the value of their personal property. It is a good idea to itemize your most costly possessions. An individual's wardrobe can add to the coverage limit dramatically and is often overlooked. Estimate what it would cost to replace every outfit, pair of shoes and piece of outerwear, and include this in your contents limit.

References

• MSNMoney: Insurance Worries for Condo Owners