FAQ

Will my lender require me to carry a certain amount of coverage?

Most lenders require proof of condo unit insurance before they approve a purchase. In our experience recently, lenders are asking for a minimum of 20% of the purchase price. This appears to be an arbitrary number that may or may not provide adequate coverage. It’s important for you to chat with one of our condo insurance experts to determine the best coverage for your unique situation.

How much will this cost me? Isn’t this really expensive?

Your condo policy’s price, or premiums, depends on three factors: the amount of coverage, the deductible (the cost the policyholder must pay before insurance payments begin), and your insurance score. Less coverage and a high deductible mean lower premiums. More coverage and a low deductible mean higher premiums. Furthermore, you can bundle your condo policy with a car policy for additional savings.

When does the Master Policy come into play?

Generally speaking, an association insures the building and common elements under a single policy, called the master policy. This policy typically provides one of three kinds of coverage:

  • The basic building (walls, roof, floors, elevators), but not unit items (such as appliances, carpeting, cabinets, wall coverings) and in some cases not interior walls
  • The basic building and unit items, but not unit additions, alterations, or improvements made by you at your expense
  • The basic building and unit items, including additions, alterations, and improvements

When a master policy is in place, you will want to purchase an individual condo policy to cover the items and changes in your unit not covered by the association master policy. This will include improvements and betterments as well as personal belongings and personal liability. You may also want to consider coverage for damage to your unit not compensated because of the master policy deductible.

Keep in mind that unit owner insurance responsibilities can vary widely. For example, some associations may have no master policy, which shifts the responsibility for insuring the structure to the unit owners. Review your building’s insurance documents and bylaws with us early in the purchasing process to make sure you comply with all requirements and purchase adequate coverage for your home.

What other types of coverage should I consider?

A typical condo unit policy also includes coverage for several other common items and situations:

Personal Property:
In most cases, condo unit owners are responsible for insuring their possessions against theft, damage, or loss. Personal property coverage insures your clothes, furniture, electronic equipment, and other household items for their replacement value. Your property is covered anywhere in the world.

Additional Living Expenses:
If your home is uninhabitable because of a covered loss, your policy will pay for anything above and beyond your normal expenses. This includes but is not limited to dry cleaning, hotel expenses, meals, etc.

Family Liability:
Liability coverage protects you if others make a claim or bring suit against you for physical injuries for which you are responsible. It also provides protection if you or a family member causes damage to others’ property. The policy will pay for defense and court costs, in addition to settlement costs. This aspect of the policy provides coverage anywhere in the world.

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