Buying and Owning a Condo
Your insurance needs
Insuring a condominium differs from a homeowners policy in that you are not insuring the actual building (the condominium association covers that under their master policy) but only your individual unit and your contents.
It is important to review your master policy since there are a couple different ways it could provide coverage. Your condo association’s policy could provide coverage for your unit based on a “single entity” concept in which the association insures your unit as it was originally built – any changes that you or a previous owner have made (new cabinets, carpets, etc.) would be excluded from coverage. The more likely way that your master policy provides coverage is on a “bare walls” basis. According to this concept, you are responsible for insuring everything inside of the bare walls, ceiling and floor. Everything from floor and wall coverings to cabinets and fixtures and of course, your contents must be covered by your insurance.
Basic condo coverage should cover your personal possessions up to a specified limit as well as provide you with good liability coverage. It is a great idea to take an inventory of your possessions (take some video footage or still photos of each room and store them in a fireproof box) to ensure that your policy provides adequate protection – this process will also help you in the event of a claim.
It is a great idea to take an inventory of your possessions (take some video footage or still photos of each room and store them in a fireproof box) to ensure that your policy provides adequate protection.
Although basic insurance coverage is a good start, you should strongly consider extending coverage through individual endorsements or a policy that includes pre-bundled endorsements. Some common condo policy endorsements include; Special Unit-Owners Coverage A which increases structure coverage and removes some restrictions on what types of losses are covered by the policy, Guaranteed Replacement Cost on Contents which pays to replace your contents at today’s cost with no depreciation, and Loss Assessment coverage which covers you against any fee that your condo association may assess you for an insurance loss that is not adequately covered by their policy. Of course, there are multitudes of less common endorsements that apply to specific situations, so it is a good idea to work closely with an agent to accurately determine your personal exposures.
Be sure to ask a representative at Ellis Insurance what perils are and what aren’t covered by a specific policy. For example, damage caused by fire, windstorm, theft, the weight of snow, etc. are commonly covered by a condo policy, while damage as a result of earth movement or flooding may not be covered or may require an additional policy.
Coverage for high value units
Ellis Insurance also provides condominium insurance for high value units. The Masterpiece® Condo and Cooperative (Co-op) policy from Chubb covers all types of loss (unless there is a specific exclusion). It offers higher limits and features not found in standard policies. This policy is designed to fill in the gaps left in the association’s policy down to the interior walls. Among the benefits, any and all upgrades made to the unit will be covered up to the limit of your coverage.
This policy also pays the full current replacement value for each covered item, with no deduction for depreciation even if you choose not to replace the item. If you must live elsewhere because of covered damage to your home, you are compensated to the amount necessary to maintain your normal standard of living. Scheduled Valuable Possessions coverage is available without appraisals, and personal liability insurance can be increased significantly over the standard policy.
For more information about extending your condo coverage, please click here.
For more information about condominium and cooperatives insurance contact us.