Condominium insurance is purchased by owners of the condo, usually when they are closing escrow as every title company has insurance requirements. Even if there is a homeowners association that has partial insurance on the building, a condominium owner will need to purchase insurance that covers the unit he has purchased.
Of course, there are additional considerations. The insurance for condominiums is not much different from a homeowner’s policy except that it is usually much less expensive considering the homeowners association has already insured most of the building.
A few things to consider when purchasing a homeowners policy:
- What is the state of the unit you have purchased? Is it in good condition?
- What amount of liability protection do you need should somebody get hurt while inside the unit? Considering the amount of wealth you have when discussing liability with your agent is a good way to determine how much protection you need.
- Will you be living in the condominium or renting it out? If you’re not living there then you won’t need a lot of coverage when it comes to personal property – after all, you don’t need to insure your tenant’s belongings. The tenant should have his own insurance to make sure his belongings are protected; this can be part of a standard lease, or merely suggested.
One type of coverage that comes with condominium policies that frequently gets overlooked is “loss of use.” If you are living there and suddenly the place is flooded or there is a fire, where would you go? Loss of use coverage helps to reimburse you for living expenses you may accumulate while the repairs take place to your condominium. Similarly, if you are renting out the condo, there is also a coverage that will reimburse you as owner for the lost income from the property.
When you call your agent, these are some important questions you can discuss with them in order to make sure the insurance policy you purchase will fulfill your needs.