Condo Insurance Policy and What it Covers
Condo insurance is also known as HO-6 insurance and is famous for protecting the condo units and providing them with personal liability coverage. Also, if the condo becomes uninhabitable, then the insurance will provide a living expense coverage. HO-6 policies can also be referred to as walls-in Coverage simply because they protect the individual unit. In contrast, the condo master policy will cover common building areas.
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There are so many questions related to condo insurance and what it covers. You will realize that all the building’s common areas will be under the master insurance policy, which is purchased by the HOA or Condo Association. This insurance will include the exterior, building roof, and other interior areas, including the elevators and the hallways.
The master insurance policy’s real charges are shared by all the unit owners, which comes in the recurring order of HOA or condo fees.
Types of Various Condo Master Insurance Policy
- The Bare Walls Coverage: This type of policy is a master insurance policy covering the structures and most furnishings and fixtures in the most common areas. It will cover any property that is owned by the HOA.
- The Single Entity Coverage: This type of Coverage will offer everything included in the Coverage of the bare wall. It also offers Coverage for the built-in units, such as the fixtures in the various condo properties.
- All-in-one Coverage: This policy will cover all the property owned by the HOA or the condo association or a policy that is a section of the condominium. The policy is one of the most comprehensive among others, which covers all additions and improvements.
You will need to ask for a copy of the declaration from the association detailing the insurance policy and what it will comprise of.
The condo association has so many other types of insurance, which include fidelity insurance policies to cover various issues with various employee dishonesty. They do not typically relate to their own insurance needs as the condo unit owner.
What Does the Condo Insurance Cover?
A condo insurance policy will provide coverage for most of the below categories:
- The Building Property: The building property will entail the unit itself, including the fixtures and walls.
- Personal Property: They include electronics, furniture, and other movable products.
- Personal Liability: This insurance policy will include any legal expenses and other lawsuits against the policyholder.
- Loss of Use: The loss of use is the expense incurred when the unit is not habitable. It will include transport and other lodging costs.
- Loss Assessment: It will include any losses which are shared by the HOA itself.
The other difference between regular HO-3 an HO-6 policy is that HO-6 policies are similar to how they cover liability, personal property, and other additional living expenses. The property and dwelling coverage for a condo can mostly control a stipulated list of the named perils such as hail, fire, vandalism, and theft. Any other hazards not named will not be covered, and thus one has to be financially responsible for the damages.
In both homeowners and condo insurance, flooding is an excluded peril that requires separate Coverage. It is important to turn your insurance into an open risk insurance policy by adding the Unit Owners a Special Coverage endorsement. Open perils cover damages from any other cause except the ones named in the named insurance policy. Perils mostly named for exclusions form coverage includes sinkholes, earthquakes, and flooding.
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Condo Building Property Policy
Condo insurance coverage will protect the interior of your house, which includes tiling, sinks, cabinetry, interior walls, floors, and other permanent structures. If the covered peril ultimately damages a condo, the policy will pay up the purchased policy’s entire price.
The divisions of insurance coverage and ownership between the owners and the HOA can present very tricky questions when the loss affects a larger part of the entire section of the condo building.
Depending on the affected areas, a peril or damage can be covered by various multiple policies at one time. For example, a leaky roof protected by the master insurance policy can also cause water damage to the unit below, which would also bring the HO-6 policy to play. Similarly, the water damaged in a neighbor’s unit, which also spreads into your unit, can also involve two H)-6 policies.
When choosing a unit coverage limit, make sure to consider an additional amount of any new construction or fixture.
Contents in a Condo and Personal Property Insurance
Mostly condo owner’s assets are secured by personal property protection in the HO-6 insurance policy. The covered property can include electronics, clothing, furniture, and any other items which are not attached to the entire unit.
The personal property is not limited to the things located inside a condo unit. You can opt to file a condo claim for any belongings which are stolen, damaged, or lost while traveling.
- Condo liability insurance: A condo liability insurance is that Coverage will protect your entire family members from any lawsuits for any bodily injury or other property damages. The liability coverage is a core part of every condo insurance policy, just like it is for the homeowners and homeowners. Without ideal liability coverage, the condo owner can be stuck while paying for any legal expenses, which can be financially stressful.
- Loss of use coverage: The loss of use coverage is not ordinary like the structural or the property coverage and can be valuable. If the condo becomes not habitable due to damages or evacuation orders, the loss of use coverage can reimburse you for an extra expense that you may have incurred to maintain a usual standard of living.
- Loss assessment coverage: This insurance coverage is also called the individual assessment coverage and optional coverage that one may add to the condo insurance policy.