(5/11/2012) While typical home insurance policies cover a wide variety of damage and liability, one thing they don't cover is condos. If you own a condo, the HO-6 homeowners insurance policy is designed just for you. What do you need to know about this type of insurance?
When you own a condo or a townhouse, you own the unit. But you also share common areas with the other tenants - hallways, elevators, foyers, parking garages, recreation facilities, and more. Because part of your property is under your sole ownership, and part is shared, a different type of coverage is needed.
Typical home insurance policies cover the costs of loss of use due to damage, liability in case of injury on the property, personal property losses, and more. Condo insurance also includes this same type of coverage, with a few key things to remember.
Condo insurance covers additions to your units, in terms of alterations, installations, fixtures, and other additions you provide and pay for yourself. Condo insurance will not, and should not, cover the costs of damage to exterior walls of the building or the common areas in the building. Since these walls and areas are owned by your landlord or property manager, their insurance covers these costs.
BYLAWS AND RULES
Specific types of coverage under your condo policy are up to you, but often a condo or townhome association may require a certain type of coverage in their bylaws, and prohibit other types.
Your first step to obtaining condo insurance, therefore, should be contacting your building association. Determine what is and is not covered by the owner's insurance on the actual building and common areas. This can help you determine what to seek out when looking for insurance quotes, and what to avoid.
How much would it cost to replace everything inside your unit? That will help determine the policy amount you're seeking, and help you better comparison shop. Take into account special valuables like jewelry, art, or antiques. Also consider some of the damages that may be more likely - flood, earthquake, fires, etc. Finally, know that certain buildings may be in areas more prone to theft, and find coverage and/or riders for protection.