A condo is a type of residence that may seem similar to a house in many ways, but it has unique qualities. For example, with a condo, the owner owns and maintains the interior of the condo unit. A condo association is responsible for maintaining the exterior of the building and the grounds. The association usually also owns the land that the condo unit sits on. This type of residential structure requires specialized condo insurance because the property owner only needs to cover the interior of the structure and its contents.
There are multiple types of condo insurance available, and many residential lenders require property owners to purchase enough coverage to replace the physical property in the event that it is damaged or destroyed. One type of damaging event that may be covered is a fire. Many lenders also require property owners to buy liability insurance. Liability insurance may pay other people for damages they incur while in your condo. For example, if a plumber is visiting your home and trips on a child’s toy in the middle of the floor, you may be responsible for related medical bills and lost wages for that individual. Liability insurance on your condo policy may pay for these expenses as well as legal bills.
Remember that the contents inside the condo also could be damaged, stolen or destroyed. Personal property insurance can be added to a condo policy as an option. The amount of the coverage can be set by the policyholder. However, remember that you will need to document the value of the contents, such as by taking pictures of all of your belongings before a damaging or loss event occurs. In addition to option for this type of coverage, you also have the choice to adjust your deductible amount. A deductible is only paid when you file a claim. However, you may not receive any benefits or proceeds on a claim until your deductible is paid.
Before buying coverage for your condo, research any lender requirements that you need to comply with. Then, consider if you want to increase coverage or add onto it.