Condo Insurance Coverage
October 14, 2008
People who own condominiums realize that their condo association is in charge of supplying condo insurance coverage. Some people have a hard time understanding that if they want to protect their personal property and have coverage that will cover whatever the condo association’s insurance does not, they must purchase a separate, personal policy in addition to the one already supplied.
Condo insurance coverage can be difficult to understand. You can read the policies repeatedly, and they still seem confusing. The terminology that is used in these policies is often what puzzles people. When you understand what the different terms mean, you can better comprehend exactly what coverage you are getting from a policy and what, if any coverage you will need to provide for yourself.
Take your condo association’s policy, for example. Quite a few people are somewhat mystified when they see that they are responsible for the property of the condo building that they live in. What exactly does that mean? It means that you are accountable and responsible for the items inside of your condo that the condo association’s insurance will not cover. Some of these things could be your carpeting, hardwood or Pergo flooring, your appliances, basically anything you might have added to the condo yourself or any part of the condo that is changeable. Each condo association has slightly different policies, so your coverage may include some of these items.
Just as many other things in this world adjust because of inflation, so do condo insurance plans. This is a good thing, because it means that the inflation increase will take care of everything that you specified you wanted coverage on. With no adjustment for inflation, things would cost more, and your condo insurance policy would not cover as much as you had originally planned for it to.
Another term that can be confusing is “loss of use”. This is a clause that specifies that if you must spend anything for an alternate, temporary place to live because your condo is having some damage repaired, it will be reimbursed to you. Again, different condo insurances will have different policies for reimbursing whatever you have paid out. This one clause can save you quite a bit of money if your condo ever needs any kind of repair work done.
Many people also misunderstand the term “personal property” when they see it in their condo insurance policy. They think that personal property should mean anything that belongs personally to them, but that is not exactly how it works. In condo insurance lingo, personal property is mainly your clothing and your furniture. Computers, television sets, DVD and CD players are not considered as furniture. For items such as this and also for any jewelry or other items that do not fall into the category of clothing and furniture, you will need to add some additional coverage to your personal condo insurance policy. You can choose two different types of coverage for these personal items – replacement coverage, where you get reimbursed for the amount it takes to replace the items, or depreciated coverage, where you are reimbursed the depreciated amount of your items.
You may want to check your own condo insurance policy so you can see exactly what you are covered for, and if you have any questions, do not hesitate to ask your agent. He is there to help you.
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