Condo Insurance

what does condo insurance cover?

According to Mariam-Webster dictionary, condominium is defined as “a room or set of rooms that is owned by the people who live there and that is part of a larger building containing other similar sets of rooms”. Essentially condominiums (or townhouses) are individually owned units in a complex. Condo association typically oversees the management of the common grounds such as walkways between buildings, community pool, etc.

Condo insurance is different than your typical homeowners insurance in that you only need to insure a part of your property even though you have full ownership of it.

Have you ever wondered what is it exactly that you are responsible to insure in your condo?   How can you even find out what insurance association is responsible for?

Let us shed some light on these questions and more, since condo insurance is so different than your typical homeowners insurance policy.

Short answer is that your condo insurance should cover what the master HOA policy does not.

There are two types of master condo policies that HOA can carry –

  • Bare Walls-In – policy insured the building itself, all the walls inside the unit but doesn’t cover any light fixtures, sinks, flooring etc.
  • All In – this policy does cover the walls and the interior fixtures

You should closely review the association bylaws to determine how much your association’s insurance covers. Even better – give a copy to your insurance agent so they can determine exactly what level of coverage you need.

The part that a condo owner is typically responsible for is the inside of the unit – the condo, the interior fixtures (unless the association has All In policy) and any upgrades they make to the fixtures.

cash value vs replacement cost

These two terms have to do with how your content is valued when there is a loss. An example will illustrate this best:

Let’s imagine that you house was burglarized and your 3 year-old laptop was stolen. With cash value coverage, your laptop’s depreciation will be calculated and you will get the check for the difference between what you paid for it and what it would be worth today after 3 year depreciation. With replacement cost coverage, you just get a check for what it costs to purchase a similar laptop today.

This could seem like a small difference, but it can be worth hundreds if not thousands of dollars.