Pros and Cons of Condo Contents Insurance

Readers Question:

I need some info on this type of insurance. I am purchasing a condo and I'm getting conflicting info on getting contents coverage or not.  I need some info explaining the pros and cons objectively. 

Answer:

If you don't have contents insurance and anything happens to the things you own inside your unit, you will have no coverage. This means that any replacement of your belongings will be at your own expense. This is the reason to have this insurance.

The con of condo insurance is that actually claiming on damage to items that are part of the unit is very tricky. In most cases, insurers will deny a claim up front, and will leave you to fight with them. Why? Well, most condos are a combination of internal finishes that "belong" to you (because they aren't original to the unit) while other finishes belong to the condominium (because they ARE original to the unit). This legal nightmare creates a situation where insurance companies will be very hesitant to pay. They'd prefer to see if another insurance company or the condominium itself will pay.

However, the exposure to your belongings is more than sufficient reason to get the insurance. If you have a 2-bedroom condo unit, you are likely looking at a minimum of $30,000 of personal belongings. If you have expensive furnishings or other expensive items, it could be much more. Whether you will have to fight to have carpet or finishes in the unit replaced or repaired, you will definitely want your personal items protected.

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