Condo insurance is designed to perform the same functions as homeowner’s insurance for individuals who own a condominium or apartment rather than a separate single-family home. Condominium insurance may also be applicable to attached town homes and other multi-family dwellings.
Who Needs Condominium Insurance?
Condominium insurance is designed to protect any condominium owner from damages to their property. Condominium insurance is usually required by the mortgage company in the event that an owner did not purchase their condominium outright but instead used a mortgage loan. In fact, condominium insurance is occasionally rolled into the cost of this loan — a condominium owner may want to check with their mortgage company before acquiring additional coverage.
What Does Condominium Insurance Cover?
Condominium insurance covers the property within an owner’s four exterior walls and between the floor and ceiling. Improvements to the property, such as counters and interior walls, are all covered under the owner’s condominium insurance policy. Everything outside of the four exterior walls (and the exterior walls themselves) are covered by the building’s insurance policy.
What Are Different Types of Condominium Insurance?
A condominium insurance policy begins with a basic policy that governs the interior of the property from damage, such as water damage, vandalism, and theft. This insurance policy will have a cap on the items that can be covered and may have an individual item cap on the cost of each item that can be claimed. For instance, there may be a total cap of $50,000 and a cap of $5,000 per item. There are additional types of coverage, such as earthquake coverage and flood coverage, which often need to be purchased separately.
What Are the Major Benefits of Condominium Insurance?
Condominium insurance will pay out in the event that your property is damaged or stolen. There are also some additional benefits: many insurance policies will, for instance, pay for your stay at a hotel while your property is being repaired.
Condominium owners require condo insurance policies to protect themselves from damages to their home, even though the AOAO may maintain a more generalized protection. Luckily, this form of insurance is usually fairly affordable because of the umbrella policy maintained by the building.