As the resident of a condominium unit, your association’s insurance most likely covers the building, commonly owned property and liability for the association, but the rest is up to you. Condo insurance protects your personal belongings and any parts of your condo for which you are personally responsible if your property is stolen or damaged.
Condo Insurance vs. Homeowners Insurance
While condo insurance and homeowners insurance may seem similar, there are differences between the insurance for a condo vs. a house. Homeowners insurance typically covers the building, as well as the personal property within the building. Condominium insurance generally covers any structure within the insured’s unit that is not covered by the condo association’s master policy. Another way to look at it is that everything within the walls of the individual unit, including electrical, plumbing, carpets, drywall, appliances and more, can be covered.
Understanding Insurance for Condos
Your condo typically has an association that covers everything outside the walls of your individual unit, including the building itself and common areas around the property. However, the furnishings within your unit, as well as your personal property, will need to be covered. Your mortgage lender may require that you carry hazard insurance on your condo, which covers damage to the interior structure of your home. When it comes to condo insurance, there is not a one-size-fits-all coverage. Your local Farm Bureau agent can help you choose the right coverage and personalize it to fit your needs.
What Does a Condo Association’s Master Policy Cover?
Your condo association will likely have a master policy, which will cover areas such as stairwells, hallways, entryways, sidewalks or parking lots, and more. For your individual unit, you will want walls-in coverage. This will cover the furnishings within your condo and your personal property. All-in coverage is purchased by the owners of the building or by the condo association to cover the exterior and common spaces.
What Does Condo Insurance Cover?
Your condo insurance policy can provide coverage for personal property, the walls-in furnishings of your unit and liability protection. As a condo owner, you will want a plan that’s specific to your needs, but here’s what each of these options cover.
Personal Property Coverage: Personal property will cover your belongings within your unit and cover them if a situation arises, such as a pipe bursting and flooding your condo.
Liability Coverage: Liability coverage protects you in the case that guests or visitors make a claim or bring a suit against you for injuries or property damage for which you are responsible.
Additional Coverage Options
In addition to condo insurance, these add-on coverages can fill in several remaining gaps on your policy.
Loss of Use: Loss of use covers additional living expenses, such as the additional cost of meals and temporary lodging, if you cannot live in your condo while it is being repaired.
Loss Assessment Coverage: If you find yourself in a situation where the unit owners are financially responsible for a shared loss, loss assessment coverage can help you.
Residential Equipment Breakdown Insurance: If the power surges in your building, you don’t want to get stuck paying to replace your broken appliances out-of-pocket. This coverage protects against the breakdown of home systems not covered under your standard condo coverage, like your furnace, air conditioning, hot water heater, appliances, TVs and more.
Scheduled Personal Property: Separate itemized or “scheduled” coverage may be needed for special or unique personal property such as jewelry, fine art collectibles and more. This is an additional coverage you can add to your policy.
Replacement Cost Coverage: Rest assured, if the worst happens, your belongings can be replaced without depreciation being factored in1 even if the items have depreciated in value. This is an additional coverage option that can be selected for household personal property as well as on the condo unit and its furnishings.
Umbrella Insurance: Once you’ve reached your personal liability limits, umbrella coverage, also known as excess liability insurance, would kick in and provide coverage for additional amounts of damages not covered by your underlying coverage. If you don’t have umbrella coverage and you’re responsible for damages that are higher than your underlying liability limits, you could be responsible for paying for those costs out of pocket. Think of umbrella coverage as an extra layer or extension of liability protection.
Protect What Matters Most
No matter where you call home, make sure the things that matter most to you are protected. Contact your Farm Bureau agent today to see if condo insurance is the right coverage for you.