Recently we have been seeing a large number of questions relative to Condo Insurance. Hopefully this blog post will help answer some of the more common questions. If you still are unsure about your condo coverage, contact our office.
What is Loss Assessment Coverage and why do I need it?
Loss Assessment Coverage is for situations where a claim occurs that either isn't covered by the condo master policy or not covered completely by it. The Condo Unit Holder's policy can step in and provide coverage (as long as it is covered by your policy). This coverage can be purchased up to $50,000 in most cases and typically won't cost more than $25. In some cases you can even purchase more than $50,000.
How much coverage should I get for the dwelling?
Condo dwelling coverage can vary for every policy. The first thing you want to do is locate the Condo By-Laws. In the by-laws it will describe the type of insurance purchased under the master policy. The master policy itself and the condo documents don't always include this information. Once you know the type of insurance coverage (studs-in, walls-in, betterments and improvements) then you can determine correct range of coverage.
You should minimally meet the deductible of the master policy to protect yourself, but some mortgages can require higher amounts of coverage (i.e. 20% of appraised value). Again each person can require different dwelling coverage, working with an insurance agent, your mortgage company and your condo association is the best way to make sure your policy is as accurate as possible.
What is unit owner special coverage?
Typically referred to as Special Form HO-32, unit owner special coverage is an endorsement to the dwelling coverage that greatly increases the types of claims covered by your unit owner policy. After you add the HO-32 special coverage you should consider exclusions from the master policy that you can include on the unit holder policy such as earthquake and water/sewer back up. You need to add these coverage options and the amount and cost can vary, contact your agent to discuss.
I rent my condo, is there anything I need to do?
If you rent any property you may need to update or even change your policy. For condo unit holders policies most of the time we add the HO-33 "unit owners rented to others." This lets the company know that you as the owner won't be living in the condo. If the condo is vacant that is another change that you would need to alert your agent.