Yes, condo insurance is not my favorite home insurance coverage, I admit it. It’s the coverage most likely to leave my customers underinsured. Why? Read on…
Condo insurance, when purchased by the condo unit owner requires some effort on the part of the unit owner to review the condo association documents to determine what part of the building/property they should insure. Sometimes owners are required to insure building/property over $1,000 in improvements and sometime they are responsible for wallboard, non-load bearing walls, counters, cabinets, vanities, trim, flooring and more. Every situation is different.
In the insurance business, we call this Coverage A, or building coverage. Knowing what amount to choose for a limit is part science and part educated guess. The science end of it is relatively simple; the condo unit owner tells the insurance agent what type coverage they need. If the condo unit owner is responsible for the entire interior of a unit our insurance agents can use a program to estimate the replacement cost of the interior. The other piece that we add to the science piece is the clean-up cost associated with a loss. How much is that? How much does is cost to clean up a water loss from a leaking pipe? Did it damage all of the flooring and the finished basement? How much does it cost to clean up soot damage from a small fire? These costs can be $1,000 or could be $25,000 or more depending on the severity. And if a unit owner runs out of Coverage A limits the condo unit owner can be left holding the bill.
Condominium unit owners insurance is my least favorite insurance as it requires some effort on the part of our client to review their association documents to determine what their responsibilities. Very few actually take the time to review the association documents and that may leave them underinsured. My suggestion is to review the association agreement with the condominium board of directors if a unit owner does not understand the requirements. Someone on the board should have understanding where the master condo insurance policy leaves off and where condo unit owners personal insurance should pick up.
There are several additional important coverages that condo unit owners should review with their agent in addition to Coverage A and all should be discussed with a licensed agent. Getting cheap condo insurance may sound like a good idea, but what would you rather have? Cheap condo insurance or condo insurance that costs a few dollars more each month and having your loss covered?
Keith Beausoleil is an insurance agent at Fortified Insurance Agency. Fortified Insurance Agency in Manchester NH specializes in coverage for renters insurance, condo insurance, and home insurance. Talk to our professional insurance agents about coverage in New Hampshire (NH) today or refer us to someone who needs condo insurance.