Condos are an appealing housing option for everyone from young adults to senior citizens. When you own a condo, you own the interior of your unit, and the condo association typically owns the exterior of the unit as well as the land that the unit is on. Because of this ownership structure, condo owners benefit from more affordable housing and fewer maintenance and repair costs. This also creates the need for a unique type of insurance to protect the condo owner from financial loss related to a wide range of possible scenarios. Condo insurance is specifically designed for these properties, providing coverage for only the interior of the unit.
There are two three primary components to most condo insurance policies. These include liability, property damage, and personal property coverage. As a condo owner, you may be held liable if others are injured on your property. For example, a guest may slip and fall on your wet floor. Liability coverage pays for all related medical and court expenses you may incur in these situations. Property damage pays to repair the interior of the unit, and it may include coverage for incidents related to fires, floods and more. Personal property can also be lost through theft, fire, floods and more, and this coverage pays to replace your furnishings, clothing and other personal items inside the unit if they are damaged or stolen.
Filing a claim against a condo policy is similar to filing another type of insurance claim. You typically call the insurance provider directly, but some insurance providers have an online claims process now. You can walk through the claims process, and the insurance company may pay the full cost of the claim up to the limit of your coverage. However, you will be responsible for paying the deductible on your policy.
Your mortgage lender typically requires condo coverage, but those who own their condo free and clear will not have this requirement in place. Nonetheless, you may be exposed to significant financial loss if your condo is not properly insured. With this in mind, all condo owners should take advantage of the benefits associated with full property coverage.