Condo Insurance

Condo insurance is a specific kind of homeowners insurance, intended for people who own property that is not a free standing house, but that is part of a larger complex of units which share use and general ownership of common areas and facilities such as elevators, staircases, hallways, and heating and air conditioning systems. The condominium complex is controlled through an association of the owners which, among other things, purchases a master homeowners insurance policy that insures the common areas and certain elements of the structure.

The condo association will generally provide one of three grades of coverage. It may cover the common areas and facilities, and the general structures such as roofs and walls and floors, and provide natural disaster coverage, while the unit owner will be responsible for everything pertaining to the owned unit. It may also cover everything walls and floors and windows in the individually owned unit, but not the personal property of the owner, or it may cover everything including the personal property of the unit owner. Naturally, the condominium owner's association fees will reflect the differences.

More typically, unit owners are responsible for insuring their personal belongings and for some part of the structures within their unit, such as wall and floor upgrades and maintenance, cupboards and fixtures, and perhaps doors and windows and so on. The Insurance Services Office (ISO) has stipulated a specific type of homeowners insurance for condominium owners, the HO-6 policy.

The HO-6 Policy

The condo owner's homeowners policy is a standard form homeowners insurance that provides to owners of condominiums the same opportunities for coverage as are made available to owners of single-family or free standing homes. It offers both property damage and personal liability coverage, but not that for natural disaster. As with other forms of homeowners insurance, natural disaster coverage must be purchased separately as an attached rider or an altogether distinct policy. The condo association will provide natural disaster insurance for the larger structure, while the unit owner may

The condo owners HO-6 policy will cover the unit owner for damage to the interior of the unit from the typical perils including fire, theft, vandalism, damage from smoke or from the weight of snow, ice or sleet, from civil commotion and falling objects, from aircraft and from vehicles, and will also have the necessary natural disaster riders. The condo owner will decide the policy limits based on the value of the property and its contents, and will choose whether to insure the property for its actual cash value or its replacement value. In some cases, condominium associations will stipulate the minimum levels of insurance coverage that a unit owner may purchase.

The condo owner will also, as other homeowners do when insuring their homes, discuss with an agent and decide the most appropriate level of personal liability coverage, in the event that a guest or visitor is injured in the unit. The condominium association's master policy will cover guests and visitors of the unit owner if they are injured in the common areas, or by one of the aspects included in the master policy, while the unit owner's coverage will provide financial coverage for injuries occurring within the unit.

The condo owner always reserves the option to purchase as much liability or other insurance as seems necessary based on the value of the contents and the owners preferences and financial capacity. Reliance on the provisions of the master policy is a good idea only as far as it concerns general structural issues. Purchasing additional condo insurance to provide fully adequate protection always remains the right of the condo owner.

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