Condominium Insurance

When looking for condominium insurance there are crucial questions to ask to help guide you to the coverage you need.  To state the obvious, a condominium is not the same thing as a house.  Usually, there is no backyard or basement, and you don’t have to worry about cutting the grass or shoveling the front walk.  Insurance is another area where homes and condos differ.  Condo owners are typically responsible for insuring just a portion of their property on their own.  However, rules differ from complex to complex, and it is important to ask the right questions to ensure you have proper insurance coverage. 

What are your ownership and insurance responsibilities in the condo association’s Master Deed?  In other words, what does the association expect from you regarding insurance requirements?  Individual owners have a collective responsibility for insuring areas of the complex owned in common - building exteriors, hallways, pool area, etc.  Individual unit owners typically are responsible for separately insuring everything within the four walls of their unit.  The condo association’s master policy, as well as association rules, should spell out clearly which parts of the complex are insured through association dues and which parts are not.

How much is the association deductible?  This is an area many condo owners don’t think about.  Condo insurance typically includes commercial insurance coverage for the commonly shared building and common areas which usually includes an association deductible.  In the event of a natural disaster or hurricane or whatever and the condo association needs major work the association will tender the claim to their commercial insurer.  But would be a deductible and that deductible would be assessed against all unit owners so if there were 10 unit owners, it would be divided 10 ways.  You could really be hit with bill you weren’t expecting or did not know about if you didn’t do your homework.

It is also important to know how to lower you condominium insurance.  Several questions need to be asked that can factor in to reducing your costs.

1. Have your agent properly estimate the value of what is being insured by you for your condo.
2. Apply modification credits.  For condos that can mean sprinkler systems and central monitoring burglar and/or fire alarm.
3. Shop around.  It is often inconvenient and may require some effort but finding the right policy and coverage can save you money in the long run.  Finally, keep in mind that there may be discounts.  Many companies offer discounts such as non-smoker or retired.