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What Is Condo Insurance?
Condo insurance, also known as HO-6 insurance is home insurance for owners of condominiums or co-ops. It covers liability claims, interior damage, improvements and additions you’ve made to your condo unit as well as your personal belongings. Additional living expenses, if you need to live elsewhere while your unit is being fixed is typically also included. The condo association’s policy generally covers the outside building structure and common areas. HO-6 insurance should be designed to coordinate coverage with the condominium’s master policy.
What Does Condominium Insurance Cover?
Typical condo insurance will cover losses you incur due to:
- Fire and lightning
- Some types of water damage
It’s important to note that most policies will have exclusions, including losses you might incur due to:
- Wear and tear
- Termite damage
Condo owners who often leave their condo vacant for extended periods of time (30 days or more) should also consider getting Vacant Condo insurance. Most insurance companies will not cover some types of claims for damages during a vacancy since they consider the property a significantly higher risk than an occupied condo.
Personal property is any item not permanently attached to the property. Condo insurance will replace these items in the event of a loss, up to the policy limit. If you have valuable items in your condo, such as a new TV or several appliances, consider reevaluating your insurance to ensure that you cover the full value of your property. You may want extra coverage for valuables such as jewelry, artwork and other collectibles.
Special assessment coverage protects all condo owners against a shared loss. In some disasters, the Association may require that all unit owners contribute to pay for the shortfall in their master insurance policy. Your association may have a high deductible which can also be passed down to the unit owner. Loss assessment coverage ensures that you don’t have to pay this additional expense yourself.
Unlike standalone properties, condos present some tricky divisions of ownership that affect how condo insurance works. The unit owner is responsible for insuring just the part of the structural interior not covered by the master policy, as spelled out in association documents. The most common language in declaration documents is that the unit owner is responsible for everything inside the bare walls and bare floor of the unit. This means you are responsible for things like carpeting, hardwood floors, wall coverings,lighting fixtures, plumbing fixtures, appliances,kitchen cabinets and any unit owner installed improvements.
In some cases, your claim will consist of a mixture of HO6 and Association insurance. For instance, if you have a leaky roof, it may stem from water damage in the unit above, which will require your Association’s insurance to pay in addition to your HO6 policy.
Loss of Use
Loss of use reimburses any additional expenses you may incur if you need to vacate your condo due to damage or evacuation order. For instance, cleaning up and rebuilding after a fire often takes several months, so you’ll need to find a new place to stay in the meantime. Loss of use will cover those additional expenses and may even cover the extra costs of a longer commute.
According to the law, it’s your responsibility to ensure that everyone that enters your property is safe. Lawsuits for bodily or property damage can be financially devastating, which is why condominium insurance provides liability coverage to protect yourself and your family against bodily injury and personal injury lawsuits. With the inflated judgements and high cost of legal expenses you may consider an Umbrella policy for that extra level of liability protection.
The Difference Between HO6 Insurance and HOA Insurance
An HO6 insurance policy covers structural aspects and personal belongings in your condo unit. However, the association also needs to have a separate policy, the master insurance policy, to protect the building’s exterior, roof, community property and common areas. Unit owners contribute to the association’s insurance premiums through their maintenance fees. An insurance professional can review your association’s documents and set up a proper HO-6 policy for the unit owner.
Reliable protection for your condo.
One of the benefits of having a JGS advisor in your corner is that you can ensure that there are no gaps in your coverage. Our team continuously advises and educates clients to make sure they are aware of common condo risks and risk management strategies to mitigate those potential claims. Leave worry at the balcony and let’s get started.
If you’re looking for reliable protection for your condo, give our team at JGS Insurance a call at (877) 547-4671 today. We look forward to helping you protect your investment for years to come!