What You Need to Know About Buying a Condo [Insurance Edition]
Condo-Minimize Financial Risk with Condo Insurance
It’s important for condominium owners to have the right condo insurance coverage. On one hand, you shouldn’t overpay for your policy each month. On the other, you don’t want to discover that, after a disaster, you must foot a bill that you simply cannot afford.
What Condo Owners Must Insure
A portion of your monthly condominium fee probably helps to insure the common areas of your complex — the swimming pool, for instance. However, it’s up to you to insure everything that’s inside your condo unit. Thus, scrutinize your condo association’s bylaws to find out precisely what you need to cover. For instance, do you own the fixtures in your bathroom and kitchen? If so, obtain adequate insurance for those items. Further, anything within your condo that you remodel is yours to insure.
Most condo dwellers insure their content items, the things that they can carry with them from one place to another such as television sets, laptops, and pieces of jewelry. At the same time, many of them forget to cover their structural items, immovable objects like cabinets and flooring. However, you neglect insuring these fixed belongings at your monetary peril.
Note that an online personal property calculator can be an especially helpful tool when you’re trying to calculate how much your possessions are worth.
Replacement-Cost and Cash-Value
There are two main types of condo insurance: replacement-cost and cash-value. The former covers the cost of buying replacement items for those that you lose. The latter only compensates you for the amount that your lost items are worth in the current marketplace.
Imagine, for instance, a flood destroying an easy chair that you purchased nine years ago. A replacement-cost policy would give you enough money to buy a new easy chair. A cash-value policy, meanwhile, would pay you whatever your insurance company calculates that chair to be valued at today, and that estimate would factor in nine years of depreciation. Thus, you stand to receive much more money from a replacement-cost policy than from a cash-value one.
Other Insurance Categories
Additionally, be certain that your insurance company will reimburse you under a variety of circumstances, including loss and damage resulting from flooding, wind, fire, theft, and vandalism. And keep in mind that the insurance industry regards a flood and a backup of water as two entirely different situations; a flood insurance plan is therefore unlikely to compensate you for any destruction caused by backed-up water. Also remember that a comprehensive plan is often the safest option for a condo owner since it can cover any number of disasters.
Finding Affordable Insurance
There are several ways to save money on a condo policy. First, you might be eligible for discounts if you employ such safety devices in your unit as alarms, deadbolts, security cameras, and smoke detectors.
What’s more, it’s possible that you could apply for a reduced rate if you obtain your insurance from the same company that covers your condo association. Further, the higher your deductible — the out-of-pocket expense that you agree to pay before your insurance company will provide you with any compensation — the lower your monthly premiums will be. Just make sure that your deductible won’t strain you economically in case you do need to pay it at some point.
Finally, investigate as many companies as you can so that you can find the most competitive rates. Social media sites are great places to start looking for insurance companies. Or you can use the help of an online insurance brokerage like Insurance Hero to help you find the best quotes.