Finding and buying condo insurance is a bit like assembling a jigsaw puzzle. To complete the picture you need to provide your insurance professional with all the correct pieces of information.
Quick List for Buying Condo Insurance
The following list should help you and an insurance professional get the best coverage and ensure you get the right coverage for your situation:.
- Take a copy of the Condominium Association (HOA) insurance policy to a trusted insurance professional who will evaluate it for coverages.
- Make a detailed list of all the possessions you bring to the condo.
- Calculate the value of your personal property, advising your insurance professional.
- Provide a written listing to your insurance professional of any completed or anticipated permanent construction upgrades or improvements to the condo.
- Calculate the value of these permanently affixed property enhancements.
- Based on the lack of coverages in the HOA policy, determine your need for extra coverages like Flood and Earthquake.
- Armed with the information above, shop for coverage.
Essential Steps When Buying Condo Insurance
As mentioned, HOA coverage can vary significantly. It is important that you read through the policy carefully so you understand what the association will pay for and what additional coverage you will need to obtain. You should be given a copy of the association’s contract when you move in. If not, your first step is to acquire one. Many condo owners are “blind-sided” by inadequate coverage. There is nothing more frustrating than discovering that your HOA will replace a damaged roof, but will not repair interior damage to your ceilings or walls caused by leaking shingles. Take the HOA policy to an insurance professional who is trained to recognize gaps in coverage so you can get the proper protection for your needs.
It is very important to have an accurate calculation of the value of insured property. Your condo insurance policy will need to cover everything not protected by the HOA. Make a detailed list of all your possessions including furniture, clothing, jewelry, electronics, removable appliances, and any other valuables you may own. Ask your insurance agent for a personal property inventory sheet, or find one online, to make it easier to compile your list.
If your association has Bare Walls coverage, then you will also need to include fixtures, flooring, and interior walls. Similarly, you should let your insurance company know if you have completed any significant upgrades or improvements (granite countertops, ceramic tiles, jacuzzi tubs, built-in stovetop, etc.), particularly if your HOA’s policy has a “original specification” clause.
When buying condo insurance, you will probably want to insure your property for replacement value rather than depreciated value to guarantee a sufficient payout to replace all losses.
Not all policies are created equal in coverage or terms. Consider extras such as flood and earthquake. Water damage and/or flood insurance is typically not included as part of the standard policy. Furthermore, many HOA plans do not cover damage caused by earthquakes, tornadoes, or other natural disasters. If you live in a high-risk area, you may want to consider adding this protection to your condo insurance policy. As mentioned, your Association’s insurance may help you out if your roof blows off in a windstorm, but it is not likely that they will fix any interior damage caused as a result.
Similarly, water damage caused by burst pipes or a malfunctioning dishwasher is often the responsibility of the condo owner, as are any repairs resulting from a break-in or theft. Be sure to ask an insurance agent to review your HOA policy and discuss the possibility of including coverage for damage caused by water, fire/lightning, wind, smoke, theft, or vandalism.
Shopping around will help in understanding what has good value and what does not. Do price comparisons and get multiple quotes before buying condo insurance. Be careful to provide the insurance professionals or agents with all the necessary information so they can tailor a policy for your specific needs. And, beware that price isn’t everything. When comparing policies, ensure that they are actually equivalent in coverage, deductible amount, and exclusions. You don’t want to wait until you make a claim to discover that your $50 a month in savings means an unaffordable deductible or a long list of exclusions and exceptions.