Condo Insurance Policy What You Need To Know FAQ
Here at Farmers Insurance, we are sometimes asked about the advantages of a condo insurance policy and if condo owners actually need it. We have prepared this article to assist you in learning about the particulars of condo insurance, including how it can protect you in the event of a loss.
Plainly much of the confusion about condo insurance centers across the fact there are multiple forms of condominium insurance. The first type of insurance is a part of your condominium association. For most condominium owners, you automatically became associated with the condominiums association when you purchased your unit. One advantage that this association nearly always offers its members is an expert insurance policy that covers the common areas of the property, that includes the garage, lobby, elevators, public swimming pool, tennis courts etc. It is also likely that this master policy also covers the physical structure of your home or unit and though such insurance covers damage to the physical building, for example the walls no matter the structure itself, as a rule, it doesn’t cover what’s inside the walls of your unit which is normally covered by a condo insurance policy.
Understanding this distinction in coverage is significant because, lets say if there was a fire that destroyed your house, it’s the master insurance policy that would cover the value to rebuild the structure of your condominium, which includes studs and walls. However, anything contained in the walls, similar to wall covers, appliances, furniture, tubs, toilets, cabinetry, fixtures, TV’s, home computers, your wardrobe and any structural improvements would be your responsibility to replace or rebuild. That is why all owners should consider a separate condominium insurance policy.
A condo insurance policy provides coverage for your personal belongings and all of the structural improvements to property for those that are a victim of vandalism, theft, fire or in the event you’re plumbing suddenly bursts.
Another advantage and benefit of a condo insurance policy is the liability aspect. Lets say, for instance, that someone slips and falls at your house, your new puppy gets loose and bites a neighbor or you accidentally start a fire and it spreads to your current neighbors unit. In these scenarios, you could be facing lawsuits or be accountable for replacing a new neighbors personal property. For these reasons, the liability portion of your condo insurance policy offers important protection against these financial risks.
Other questions we commonly get asked are, can I determine what policy I need? As well as how much coverage should I receive? To reply this question, we’d first take a look at the king policy already in place. Next, we’ll use our industry insights to help you estimate what it will cost to rebuild the kitchen, the bathrooms and the opposite fixtures contained in the condo, and eventually, we might ask you to answer this simple question, the volume of should it cost to switch everything in your home if it have been all destroyed or stolen? After taking all three of these aspects into consideration, we’ll have a good idea of the coverage levels needed.
Next, you’ll want to know the difference between extended replacement cost and actual money value for ones own property with extended replacement cost coverage in place. Which means your policy would provide you for the present amount of an item you have to replace after having a disaster. Without extended replacement coverage, chances are you’ll easily be paid on the dollars value whatever the older or used item after depreciation is taken into account. So, lets say you acquire a brand new couch four years ago for $1800, without extended replacement coverage set up, you’d only receive what are the couch is worth today and that could be far less than the original asking price of $1800. It’s similarly to getting the eBay or Craigslist price on your items, and we all know that’s not much.
We hope this information has helped to go away any misconceptions you may have had regarding condominium insurance. If you want to learn even more, see my power condo and townhouse power video in a recent blog post at How To Insure A Condo or Townhouse and Avoid Costly Mistakes.
Call us today at 480-491-8585 to set up your Arizona or California condo or townhouse insurance policy. We also specialize and insure a lot of HOA’s in Arizona and we are always looking to provide excellent service to our Property Manager partners.
* Legal Disclaimer: Always make sure to check with your insurance agent, insurance company or department of insurance as the information in this video for your state may be different.
Topic: Condo Insurance FAQs