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Insurance

Condo Insurance: Frequently Asked Questions

(5/29/2012) When you own a condo, you own a piece of property within another piece of property. While you own what's within your unit, your condo association owns all common areas within the building. This dual ownership means insurance can be a little tricky.

It's important to understand the basics of condo insurance, as well as what is covered and what isn't. But there are additional questions that often come up with condo owners. Here we tackle some of these key queries.

REMODELING
Your condominium insurance usually covers all the interior structures you own, including appliances, flooring, cabinetry, and fixtures within the condo. Generally, coverage for these structures will be limited to 10% of your personal property limit: If you've established coverage of $50,000 on your personal property within the condo, $5,000 of that will cover structures and any upgrades you make. If, however, your remodeling substantially increases the value of your interior structures and this 10% limit will not be sufficient, you can increase the coverage limit up to 50%.

ROOMMATES
Condo insurance covers only those people listed on the insurance policy and family members. If you would like coverage for your roommate, you must be listed as co-applicants.

INJURY
If you are injured while in your condo, insurance will actually cover your medical expenses. The limits for medical payments are usually capped at $10,000.

LOSS ASSESSMENT
Sometimes when a condo building suffers major property damage due to natural disasters or other situations, the master policy owned and paid for by the condo association won't fully cover the cost. In these cases, your homeowners association can legally make each unit owner pay a portion of the remaining costs. These can be unexpected and occasionally expensive payments for condo owners. However, if you purchase loss assessment coverage from your insurance company, these expenses are covered up to a specified limit.

EXTRA COVERAGE
In addition to the standard coverage of liability and personal property, condo owners can purchase additional coverage. In addition to loss assessment coverage described above, identity theft coverage is an option, where companies will pay up to a specified amount ($25,000 is typical) in qualifying expenses to restore your identity. Riders for specific valuables such as jewelry, fine art, china, and others is another common option. Finally, scheduled property coverage provides additional coverage for valuables lost or stolen outside the condo and anywhere in the world, up to their actual cash value.

For additional reading:

Homeowner's Insurance during a Remodel:
http://www.preferredconsumer.com/real_estate/articles/homeowners _insurance_
during_remodeling.html

Read the Policy and Weep (Loss Assessment):
http://www.nytimes.com/2006/06/18/realestate/18home.html