Advice on Condo Insurance

Condo owners are responsible for insuring their unit and its contents, but they also share ownership of certain common areas with other unit owners. Due to this common ownership, they also share responsibility for insuring such areas. It is important to ask your insurance agent for advice on condominium insurance to make the right decisions regarding coverage.

• All condo owners in a complex share the responsibility for insuring certain common areas, including the building exterior, hallways and the pool area. The condominium association’s insurance policy covers these common areas. The monthly condo association fee is used to pay for this insurance.


• The condo association has a master policy. This policy should clearly spell out which areas of the complex are insured and which are not. The association’s bylaws should explain what is included in the coverage. At the time of purchase, you should receive a copy of the association’s insurance agreement. This is important, because there may be gaps between your condo’s insurance coverage and the condo association’s coverage.


• Condo association insurance policies typically carry a deductible. As a condo owner, pay close attention to the deductible amount. In the event of a loss, the deductible would be divided between condo unit owners. Recent trends indicate that condo deductibles are quite expensive, some as high as $50,000.


• Make sure to have the proper insurance coverage for your property. You are responsible for insuring everything within the walls of your condo. Before deciding on how much coverage to purchase, make sure to know exactly which parts of the unit need to be insured.


• You will need to pick between two basic coverage categories: cash value and replacement cost. Cash value coverage replaces the value of the insured items minus depreciation. Replacement cost will replace the item for what it would cost to buy it today.


• When insuring your condo, get coverage for contents and structural items. Contents include electronics, furniture, area rugs, jewelry and artwork. Structural items include cabinetry, flooring, carpeting and lighting.