Condo & Townhouse Insurance Basics
WHY HAVE CONDO & TOWNHOUSE INSURANCE
While there are no laws requiring owners to carry insurance, if you have a lien against your home your lender will most likely require insurance to protect their interest in the property.
But what about your interest? For many people, their home, whether a house, condominium or townhouse, it is their single largest asset. It only makes sense to protect that asset from loss.
CONDOMINIUM POLICY VS. HOMEOWNERS POLICY
While townhouse insurance is very similar to insuring a free standing home, condos can be a bit different.
You live in a condo, and your association has insurance, right? So why do you need insurance? Condominium homeowners insurance covers items not insured by the association’s policy, such as, property damage to personal belongings, wall, floor and ceiling coverings, and any accessories not originally installed in the unit. It also provides additional coverage for personal property, loss of use, personal liability and medical payments.
BEFORE YOU BUY
Check with your association and find out what insurance you will need.
~ What parts of the interior are covered by the association’s policy and what portion are you responsible for. Make sure that you have adequate insurance to cover repairing or replacing the portion that is your responsibility.
~The contents of your condominium, will not be covered in the association’s master policy. Estimate the cost to replace your contents and buy insurance for that amount.
~The association’s policy usually will not provide any liability coverage for your unit or your personal exposures. Be sure to purchase adequate liability insurance usually $300,000 to $500,000 or more, depending on your situation.
In the event your association has insufficient funds for any loss, you and other homeowners in the community can be assessed a proportionate share to pay for damage to your building and other situations. Check to see whether the condominium insurance you purchase covers these assessments. You have the option to buy Loss Assessment Coverage, which is available in amounts of $5,000, $10,000 or more.