Condo Insurance

If you are a condo owner, you have a unique situation. You will need to have your own condo insurance, but you will also need to be sure that your condominium corporation also has insurance. You will insure your belongings and the structural parts of the building that you own (like the kitchen cabinets that you installed). Your condo board will need to have a policy to insure the overall building, including your unit.

Your needs for condo insurance are similar to the homeowners - with some special caveats because of the unique ownership relationship that you have with your condominium corporation.

To be sure that you adequately insure the structural components which belong to you, check with your condominium corporation and read the corporation's insurance policy. This area - what you own versus what the corporation owns - can be a very grey area.

Here's an example: A condo owner on the top floor is away for the weekend. In this time, their hot water heater springs a leak. The water travels from the top unit down through the roof of the unit below and causes significant damage. Now, whose insurance pays? The top floor unit holders? The lower floor unit holders? The condo corporation? Well, in this case - no one's insurance wanted to pay! At that time, the author was on the condominium board and got a first hand view of the finger pointing and other legal wrangling. It was ugly. Eventually, the condo corporation's insurance paid for part of the repairs, and the lower unit holder had to sue the condominium corporation itself to have the original finishes in the apartment returned to their original condition.

The moral of the story? Be informed about your condo insurance before something happens. The more you know about the condo corporation's insurance the better you can tailor your unit's coverage. Also, know what you own! In this case the condo unit holder actually owned the paint on the walls - and this caused the problem with having the unit repaired.

Condo owners can get a special type of condo insurancedo not remove coverage against "unit assessment". We'll explain with an example: let's say there is a fire in the lobby of your condo building. Condo insurance for the condominium corporation will pay for most of it. But if the policy is only for 'actual cost' as opposed to replacement cost there will be an amount that must be covered by the corporation. At this time, you may be required to pay a unit assessment which is in addition to your regular condo fees. This 'special assessment' could be a very large amount. Condo unit assessment coverage will protect you in the case of this occurring.

Condo owners will also need coverage for their contents, and liability coverage. You may also want to consider title insurance.

Read more general information about Home Insurance, Home Insurance Policy and Condo Insurance. Read specifics about Structural Home Insurance, Home Content Insurance, Home Liability Insurance, Additional Liability Coverage, Title Insurance, Flood and Earthquake Insurance, and Living Expenses Home Insurance. Don't miss the sections about Home Insurance Savings, Types of Home Insurance Policies, What Home Insurance Covers and Level of Home Insurance for definite information you should know before you buy.

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