What You Need to Know before Buying Condo Insurance
Before you purchase condo insurance, there are a number of important issues to consider. Condo insurance is not the same as a traditional home owners insurance policy. Instead of covering the outside of the house too, condo insurance only covers from the drywall in. Your association is responsible for the roof and other exterior damage.
The first question is what deductible are you going to set. The deductible is what you pay before the insurance kicks in. If you were to have a $15,000 claim and a $5,000 deductible, you would only get $10,000 from the insurance company. The policy premiums you pay will largely depend on what your deductible is. The higher the deductible the lower your monthly payments will be. If you have money in savings, go with a higher deductible.
A higher deductible will also keep you from making claims on small items. This is a good thing because if you have too many claims – generally 2 or three a year – your insurance company will drop you.
The next thing you need to consider is how you want your items replaced if something were to happen to your personal property. Let’s say the TV you bought 2 years ago for $900 was stolen. If you have a replacement value policy, you’ll get $900 to buy a new, similar TV. If you have an actual cash value policy, the insurance company will give you the amount it would cost to buy a 2 year old TV from Craigslist. Replacement value policies are more expensive but if you don’t want to be shopping for new furniture at garage sales, you may want to consider it.
Do you rent out your condo? If so, you should require the renter to purchase renter”s insurance. Think of it this way, if you were to turn the condo upside down, anything that fell out is the renter’s responsibility and anything that stayed put is yours. Renters insurance also helps to protect you if the renter were to damage the property.
So, those are some of the basics of condo insurance.
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Tags: condo, condo insurance, Finance, home, homeowners insurance, Insurance
