When you own a condo, you typically own the interior structure, but you do not own the exterior structure or the land that the building sits on. This is a unique type of property that requires a special type of insurance. Condo insurance is available for condo owners to use for property-related losses and liability issues. Before you buy coverage for your condo, you should learn more about the different types of coverage available for condo and how the claims process may work.
Condo insurance may include a liability component, and this provides financial benefits to other people if there is a liability claim against the property. For example, if a service provider slips on your wet kitchen floor and breaks his arm, liability coverage may pay for related medical bills and other expenses that you may otherwise be responsible for paying out of your own pocket. Other condo coverage may pay for repair work to your dwelling. This may be repair work for damages caused by water leaks, windstorm damage, fire or something else. You may also be able to buy coverage for the contents inside your dwelling, such as furniture, electronics, appliances and clothes. You can usually set this coverage limit at an amount that you believe is reasonable based on the value of your condo’s contents. Another optional type of coverage that you may be able to add onto your condo policy includes displacement coverage. If you are displaced from the condo because of significant damage, such as a fire, the coverage may pay for you to relocate temporarily or to live in a hotel.
If you have a mortgage loan on your condo, your lender may require you to maintain some type of coverage on your condo, but you can always buy more coverage than the lender requires. Remember that you can also choose your deductible when you set up coverage. Your deductible amount is payable each time you file a claim against your condo policy. Therefore, ensure that you set up a deductible amount that is affordable for you to pay at a moment’s notice.