Index | Property Insurance | Condominium Coverage
Condominium Coverage, also known as HO-6, is designed for the owners of condos and co-op apartments.
The condominium building is a commonly owned property and is normally insured through a condominium association policy, also known as a master policy. The condominium association policy covers items which are structural parts of the dwelling and the shared areas of the complex, such as the roof, the basement, the elevator, the parking area, the swimming pool, exterior walls and walkways. Living in a condominium, you become a shareholder in the corporation and it allows you to access these shared areas. At the same time your association policy appears to be rather limited when it comes to your personal property. For example, it does not cover losses resulting from burglary, damage from water plumbing and many mishaps that may occur on the part of the building occupied by the condominium unit owner. It does not include Personal Liability either.
Condominium Coverage is intended for bridging the gap between what is covered by your association policy and what is left over. The insurable perils under this type of the Homeowners contracts are basically the same as under the other types of contracts and include the following occasions: smoke, windstorm or hail, fire and lightning, earthquakes (optional), theft, vandalism, water escape from malfunctioning pumps, but not floodwaters, freezing of a plumbing, heating or air-conditioning system, but not when you leave for more than four days, glass breakage, impact of vehicle or aircraft and damage from falling objects.
The policy of this type provides personal property coverage, personal liability for residents and guests of the policyholder and specific coverage of improvements to the owner's condominium unit.
As it can be inferred from what is said above, Condominium Coverage is potentially useful in the situation when you live in a condo unit which is already insured through the association policy. Under the circumstances you are most likely interested in protecting your own interests and finding a way to cover your personal belongings and what is not covered under the association policy.
Condominium Coverage also protects you against personal liability for injuries to visitors to your home or for damage you accidentally cause to other people's property including your neighbors'. Normally, the Medical Payment section is also part of your Condo policy. It guarantees reimbursement of healthcare expenses to people injured on your property.
In addition, Condominium Coverage protects any improvements, additions, alterations, installations, fixtures made or acquired by you or any previous owner of the unit. It is worthwhile protecting your property through this endorsement because standard policies impose limits on the total amount which you will be reimbursed in the event your condo suffers a loss from a covered peril. The set limits may not be high enough to cover the replacement cost of the introduced improvements such as new appliances, upgraded floor coverings, a new kitchen cupboard, or an expensive built-in cabinet.
It should be noted that this type of Homeowners Insurance policies incorporates additional living expenses benefit, which means that the insurance company will reimburse you for your living expenses you incur while your condo unit is being repaired.
To determine the amount of Condominium Coverage you need to purchase, it is advisable to carefully study the provisions, conditions and exclusions of the association policy. A rough estimation suggests that the amount of coverage to buy depends on the costs necessary to replace your condo unit and the value of your condo's contents. Any type of Condominium Insurance policy can be extended to cover a number of potentially dangerous situations. For example, additional coverage may protect some seasonal property or motor vehicles, or it ensures that you get reimbursement in case you are denied access to your home because of a peril coming from the neighboring premises. For people living in a condo unit and working at home there is a special endorsement insuring their home-based business and offering additional liability.
Another option you can make use of under Condominium Coverage is to provide protection for such items as jewelry, artwork, collectibles, computers and other expensive things. Such items are exclusions in most of the policies, but they still can be fully insured under what is called a floater. Without a floater only a set percentage of the cost can be reimbursed. So, remember that a floater is one more way to extend your coverage.
And, of course, you should not forget about discounts. Insurance companies usually offer a variety of discounts. On closer examination you will certainly find a factor which will help reduce your premium costs. Factors reducing your premiums range from quite trivial ones assuring the safety of your place of living to those which are subject to legal regulations of relationships between different providers. The first group of factors includes smoke detectors, alarm systems, a doorkeeper, closed-circuit television etc. The other group of factors goes into effect in case of a multi-line insurance when you are insured through several policies. For example, if you insure your condo unit through the same insurer that underwrites your building's insurance policy, you can get substantial discounts.
Much of the information about how Condominium Coverage works reflects the general principles of Homeowners Insurance. Most importantly, under the corresponding circumstances this policy is a cost-effective way to condo ownership helping you make financial worries become a thing of the past.