Finding condo insurance coverage is generally seen as being more complicated than traditional home insurance coverage. While you research coverage, speak with your lender and go over your condo association guide.
Your condo association guide includes a master policy. This policy notes the extent of coverage available for damages to common areas and outside walls. Your condo may have a bare walls master policy that covers any damage to the exterior walls of the condo. However, you would be responsible for protecting the items on the inside.
The other option is an all-in policy that covers the interior and exterior of your condo. Make sure that you are aware of the type of master policy that your condo has before you start shopping. This should help you figure out the type of condo insurance policy you need.
How Much Condo Insurance Coverage Do You Need?
The following are a few steps that would help you determine your coverage needs:
- Determine the Value of Your Belongings
To figure out which condo insurance coverage is the right fit for your needs, start by assessing your personal items’ value and taking inventory of them. If you have expensive jewelry and other luxury items, you’ll have to add extra coverage in order to fully protect those items if they are stolen or vandalized. Make sure that you have a personal property limit large enough to replace all of your personal items in the event of an emergency.
- Estimate the Replacement Cost
Figure out how much it would take to repair the interior of your condo. Your insurance company will give you an estimate regarding your condo’s replacement cost value. Variables that may impact the replacement cost value include building permits, labor costs, county fees, building materials, and square footage. You can also contact a contractor or architect to find a quote for these services. In most cases, you are obligated to cover at least 20 percent of the condo’s total value.
- Analyze Your Assets
This should help you determine the amount of liability coverage that you need. If someone gets seriously injured on your property, you could be sued. You need to have enough liability coverage so that your assets are not at risk during litigation.
- Consider Additional Living Expenses
You should also consider adding emergency living coverage. If your condo is totaled, you’ll have to find temporary lodging elsewhere until the unit is repaired. Try to find a policy that covers your temporary lodging expenses for a full year.
Dwelling Coverage Explained
Dwelling coverage protects your belongings if they are damaged in an emergency. This coverage is necessary because traditional condo insurance doesn’t cover any damage to your belongings. Keep in mind that dwelling coverage has limits for different categories. Dwelling coverage also contains exclusions. You may not be covered if your unit is damaged due to an earthquake or severe flooding. You’ll have to purchase additional coverage to protect your property in these scenarios.
Also, be sure to update your coverage as your needs evolve. Perhaps you have renovated your condo in the last few months. Thanks to the new upgrades, it will now cost more to insure your unit if damages occur. Your condo insurance policy has to adjust to reflect the changes.
Finding the right condo insurance policy will take careful, planned effort. Take your time and assess your options. Think about the future as well and how your needs may evolve over the years. The experts here at Jack Stone Insurance Agency will guide you through the process. We want to make sure that you find the right condo insurance coverage to protect your belongings in any situation. For assistance with all your coverage needs, contact us today!