Components of a Condo Insurance Policy

Condominium Home Owners Associations usually require individual owners to obtain condo insurance. The policy tells you how to file a claim and how to contact your insurance agent. It also tells you how to report suspected insurance fraud. The Declarations Page of your Condominium Insurance Policy lists the coverage and limits for your individual policy. The basic coverages are dwelling (Bare Walls or All In), private structures, personal property, personal liability, medical payments, identity theft, endorsements, and loss of use. Bare Walls coverage takes care of interior walls, cabinets, bathroom fixtures, window coverings and floors where the condo association only covers common property and exterior walls. All In covers personal property and enhancements when the condo association covers common property, exterior walls, and standard interior walls, cabinets, floors, and bathroom fixtures. Property and personal property coverage can be actual cash value or replacement cost. Replacement cost covers the real cost of replacement. Actual cash value is what the item is worth at the time of loss and so may be significantly less than the cost of replacement. Loss of use covers the costs of temporary housing and food when disaster prevents you from living in your condo. Liability covers the costs if a visitor is injured when he/she is at your condo.

Identity theft and credit protection provides: support from an identity theft expert for one year, assistance with notifying law enforcement and other agencies, a credit report from three credit bureaus, a detailed case file for law enforcement and insurance, credit monitoring, fraud monitoring, and fraud alerts and follow-ups for one year.

Optional coverages may include sewer, drain and sump pump coverage, earthquake and volcanic eruption, scheduled personal property such as jewelry, furs, art work, photographic equipment, guns, coins, or musical instruments. Back up of sewer or drain pays for damage caused by water or sewer that backs up into the condo; not all policies provide this automatically. The maximum amount to be paid per event is listed on the Declaration Page. The deductible for each loss is also listed. The Declaration Page also provides rating information which explains how the cost of your policy was determined. Protection Class is determined by fire protection available such as fire-fighting equipment in your community, distance of condo from a fire hydrant, water source, and whether the fire department has full time fire fighters or volunteer fire fighters. The distance from the fire department and type of construction are also considered.

The Declaration Page lists eligible discounts such as other coverages (i.e. autos), iron bars covering windows and doors, central electronic alarm systems, smoke alarms, or automatic sprinkler systems. All of these items as well as your credit rating may lower your premiums. The insurance company does need to know the age and occupations of all people living in the condo. Other factors that determine the cost of the premium are driving record, record of claims, and condition and maintenance of the property. The higher the deductible you agree to pay, the lower the insurance premiums.

Flood insurance and tornado or hurricane insurance would be provided in a separate policy.