What is condo insurance?

 A condo insurance policy is designed for those living in a condominium or co-op. Like a homeowners policy, it protect ones personal belonging against loss and provides liability coverage for damage to someone elses person or property. One must be careful, however, about defining personal property. Homeowner association by-laws define what should be insured on the inside of a unit. Many times the by-laws state that a unitowner is responsible for everything inside the sheetrock. Thus, a unitowner is responsible for insuring the paint, cabinets, plumbing fixtures, floor covering, etc., which is not normally thought of a personal property. The addition of these items can greatly increase the amount of coverage a policy must provide to full protection.

As in a standard homeowners policy, loss of use coverage is also provided in the event the unit becomes uninhabitable because of damage.

Loss assessment is a unique feature of condominium insurance. Under the condo association's bylaws, each owner will be assessed a proportionate share to cover major property and liability losses. For example if the building and commonly shared areas are destroyed by an insured disaster such as a windstorm and the losses are not fully covered by the master policy, your association may assess a certain amount to all unit owners to cover the loss. Your condominium unit owners policy's loss assessment coverage would help pay for your share of these assessments. The standard coverage for loss assessment is $1,000, but higher limits may be available.

Perils normally covered by a condominium policy are:

• Fire or lightning
• Weight of ice, snow or sleet
• Windstorm or hail
• Theft
• Accidental discharge or overflow of water
• Explosion
• Riot or civil commotion
• Accidental eruption of hot water heating system
• Aircraft
• Vehicle damage
• Freezing
• Smoke damage
• Artificially generated electrical current
• Vandalism or malicious mischief
• Falling objects

In addition, loss by flood or earthquake can be obtained by either a separate policy or a rider to the condo policy.