Condominiums are an excellent alternative to single-family homes and rented units, but they come with their own insurance challenges. Learn how to find the best condo insurance policy to fit your space and budget.
Dwelling insurance is complicated, especially when you don’t own the whole building you occupy. As a condo owner, you’re only responsible for insuring the internal contents of your unit, and your condo association handles the rest. Southpoint can help you determine where your condo association’s coverage ends and where yours should begin.
Individual condo insurance policies are unique because they build on your condo association’s existing policy. Whereas renter’s policies only cover your personal property and liability, condo policies add coverage for the interior structures in your owned space. Because your condo association owns the exterior of your building and the shared space around it, you aren’t responsible for insuring those areas.
Different condo association policies, also known as master policies, contain varying levels of coverage, which is why it’s crucial to read the master policy before securing personal condo coverage. Condo association policies typically cover the following:
- Exterior structures
- The land around the condominium complex
- Common areas, including shared lobbies, swimming pools, and gyms
Some condominium associations offer “all-in” coverage, which means that unit owners only have to cover personal property and liability. Other associations purchase “single entity” coverage, which protects the items in each unit at the time of purchase but excludes coverage for renovations. “Bare walls” coverage only protects exterior structures and excludes all structural elements and personal property in individual units.
Depending on your association’s policy, individual condominium policies can contain some or all of the following coverages:
- Dwelling coverage: Your dwelling coverage protects any structures that the master policy does not cover, including walls, fixtures, and built-in furniture.
- Personal liability coverage: If someone suffers an accidental injury in your unit, they can sue you for medical costs and other damages. Personal liability coverage helps cover defense and settlement costs.
- Personal property coverage: Without insurance, you would have to drain your bank account to replace every item in your condo after a loss. Personal property coverage protects your finances by paying for property repairs and replacements up to a specified coverage limit. Personal property can include electronics, furniture, clothing, and other items outlined in your policy.
- Loss of use coverage: If the damage to your condo is so severe that you have to relocate temporarily, loss of use coverage will pay for additional living expenses.
- Loss assessment coverage: Your condo association only covers losses up to their policy’s coverage limit. If claim costs exceed the master policy limits, your association can split additional costs between unit owners. Loss assessment coverage helps pay for these fees.
Most condominium owners don’t have the time or expertise necessary to decipher their association’s policy. At Southpoint, we use our industry knowledge to determine exactly how much coverage you need. After reading through your condo master policy, we gather affordable quotes from the biggest names in insurance before helping you choose the option that’s right for you.
If you own a condo, you may be wondering: How is my condo insurance different from homeowner’s insurance? Both policies protect spaces you own against property and liability losses. However, condo policies only cover interior structures, whereas homeowner’s policies also cover exterior structures like garages, yards, fences, and sheds.
Purchasing a homeowner’s policy is more straightforward than buying a condo policy. When insuring a home or condo, you need to know your home’s value, the perils you need protection against, the deductible amount you prefer, and any additional coverages you might need (such as flood, earthquake, and jewelry coverage). However, when insuring a condo you need additional information regarding the exact coverages in your association’s master policy. Additionally, each time your condo association’s policy changes, you will have to amend your policy as well.
Finding and managing an individual condo policy can be a significant undertaking, which is why many condo owners partner with insurance agents. At Southpoint, we do the heavy lifting required to secure condo coverage, and we handle the day-to-day management of your policy. Our team members ensure your condo and assets are adequately protected at all times.
There is no one-size-fits-all condo policy for unit owners. The kind of condo insurance coverage you need depends on several factors, including:
- Your association’s master insurance: Insuring something that the master policy already covers can cost you extra money and cause issues during the claims process. If two policies cover the same item, insurance companies may refuse coverage or argue over who is responsible. Additionally, leaving an item uninsured could leave you on the hook for thousands of dollars if you suffer a loss. Every individual condo policy should base its coverage on the master policy.
- Your unit: You choose your policy limits based on the value of your property. If you own an expensive condo and valuable personal property, your limits and premiums will be higher than the average.
- Your location: Insurance companies charge different premiums in different states. If you live in a safe area with a low risk of natural disaster, you’ll pay a lower premium than condo owners in high-crime or disaster-heavy areas.
- Your budget: There are steps you can take to lower your insurance premium, but they could end up being costly during a claim. For example, policies with higher deductibles have lower premiums, but you’re responsible for the full deductible amount in the event of a loss.
Finding the right condo insurance policy can be overwhelming, but the experts at Southpoint can help. We know how to address coverage gaps, stay below your budget, and use your master policy as a guide. If you want to get the best coverage at the most affordable price, become a Southpoint personal lines partner today.
Condo policies are an excellent first step in protecting yourself against financial devastation, but they don’t cover every risk. You may need an additional earthquake, personal property floater, or flood insurance policy to protect your treasured assets sufficiently. Don’t wait until it’s too late to find coverage—contact Southpoint today to discuss your coverage gaps or request a personal insurance quote.