Condominium owners sometimes make the mistake of thinking their condominium association covers their property. While your association probably insures your building and common areas, its coverage ends at your walls. You need your own condominium policy to cover damage to your interior walls, floors, cabinets, and fixtures.
Like a homeowners policy, a condominium policy also protects your personal property. “Contents coverage” pays for damage or loss to your personal property, whether it’s at home or off premises. The policy also provides liability protection that will help pay your attorney and court costs if you are sued for injury to another person or another person’s property.
The cost of your condominium insurance policy will depend on the type of coverage you select. The basic “named perils” policy covers you only for loss or damage caused by one of the perils named in the policy (hence its name). These generally include fire or lightning, windstorm or hail, explosion, and more. A broad-form policy provides broader coverage, covering you for the named perils listed above, plus others, including damage from burglary; falling objects; freezing; electrical surges; and weight of ice, snow, or sleet.
You may also be able to purchase an “all-risk” condominium policy, which differs from a named perils policy by covering damage or loss caused by any peril, unless specifically excluded by the policy. Typical policies exclude losses due to earth movement, water damage, power failure, neglect, war, nuclear hazard, and intentional loss. “All-risk” coverage costs more, but provides more comprehensive coverage.
Another choice that will affect cost is whether you purchase actual cash value or replacement cost valuation.
- Actual Cash Value: Your possessions are replaced minus a deduction for depreciation.
- Replacement Cost: Your possessions are replaced for their actual cash value with no deduction for depreciation.
Since standard condominium insurance policies do not cover, or cover for only limited amounts, valuable items such as jewelry, silver, art, musical instruments and so on, you may want to consider purchasing a personal articles floater policy for these items as well.