How condo claims work differently than home insurance claims

Condo living can be ideal for people who prefer to live close to the hustle and bustle of an urban area or for those who don’t want the hassle of maintaining a house or its property. With that freedom come a few extra things to remember, one of which is the fact that condo insurance claims work differently from home insurance.

What Is Condo Insurance?

Similar to home insurance, condo insurance is designed to protect you from unexpected damage or loss resulting from:

  • Fire
  • Burglary
  • Water damage
  • Other insured perils

Unlike home insurance, condo insurance works in conjunction with another insurance policy—the master policy purchased by your condo association.

In essence, you are only responsible for damage to your unit, as well as your belongings that aren’t covered under the master policy. This means that condo insurance claims work differently from home insurance.

What Is a Master Policy?

The master policy purchased by your condo association usually covers these basic elements:

  • The building itself
  • Common areas
  • Elevators
  • Other mechanical features of the building

It will also include liability coverage in the event someone is injured in the building. The coverage descriptions, exclusions and limits can be quite different between master policies, so every condo owner should ask for a copy of their building’s documents to read and possibly forward to their insurance advisor. 

What Does Condo Insurance Cover, Exactly?

Much of a condo policy is similar to a home policy—there are only a handful of key differences. For example, your personal belongings coverage and valuable articles coverage is exactly the same as a home policy.

Similarly, the personal liability portion of the policy provides the same coverage as the home version.

There are a few very important differences worth noting, though.

Property Coverage

Condo insurance property coverage only protects what is not covered by the master policy. For many master policies, this includes everything from the wall studs outward (but always read yours just to be sure).

In practical terms, this means the drywall, flooring, wiring, kitchen cabinets and everything else that originally came with your condo. Items such as windows and fireplaces could be covered by the master policy, but not necessarily—don’t get caught without coverage on those!

Make sure all of the property is covered by at least one of the policies.

Additions and Alterations

This coverage protects all the renovations you made to your unit. This could include things like:

  • Hardwood or stone floors
  • Kitchen fixtures
  • Crown mouldings

It’s essential that you ensure you have enough additions and alterations coverage to replace all of the investments put into your condo.

Loss Assessments

This coverage is unique to condo insurance. It protects unit owners from large building and common area repair bills that the master policy will not cover or may not have sufficient coverage to pay the entire amount.

For example: if the entire ventilation and heating system needed to be replaced due to a covered loss, then a individual condo unit couldn’t cover it alone (nor should they). The master policy may not have limits high enough to pay for the necessary work, either.

In this case, the condo association will assess a cost that each unit owner will need to pay in order to cover the expense for the building-wide repair. Loss assessment coverage will pay for your portion of this expense.

Contingency Coverage

This coverage protects your condo unit (as compared to the building and common areas) when the master policy fails to protect you, or if its limits are insufficient.

While many of the coverage options offered by a condo policy are similar to a home insurance policy, there are many condo insurance claims that work differently from home insurance that every owner should understand.

Condo living can be ideal for people who prefer to live close to the hustle and bustle of an urban area or for those who don’t want the hassle of maintaining a house or its property. With that freedom come a few extra things to remember, one of which is the fact that condo insurance claims work differently from home insurance.

What Is Condo Insurance?

Similar to home insurance, condo insurance is designed to protect you from unexpected damage or loss resulting from:

  • Fire
  • Burglary
  • Water damage
  • Other insured perils

Unlike home insurance, condo insurance works in conjunction with another insurance policy—the master policy purchased by your condo association.

In essence, you are only responsible for damage to your unit, as well as your belongings that aren’t covered under the master policy. This means that condo insurance claims work differently from home insurance.

What Is a Master Policy?

The master policy purchased by your condo association usually covers these basic elements:

  • The building itself
  • Common areas
  • Elevators
  • Other mechanical features of the building

It will also include liability coverage in the event someone is injured in the building. The coverage descriptions, exclusions and limits can be quite different between master policies, so every condo owner should ask for a copy of their building’s documents to read and possibly forward to their insurance advisor.

What Does Condo Insurance Cover, Exactly?

Much of a condo policy is similar to a home policy—there are only a handful of key differences. For example, your personal belongings coverage and valuable articles coverage is exactly the same as a home policy.

Similarly, the personal liability portion of the policy provides the same coverage as the home version.

There are a few very important differences worth noting, though.

Property Coverage

Condo insurance property coverage only protects what is not covered by the master policy. For many master policies, this includes everything from the wall studs outward (but always read yours just to be sure).

In practical terms, this means the drywall, flooring, wiring, kitchen cabinets and everything else that originally came with your condo. Items such as windows and fireplaces could be covered by the master policy, but not necessarily—don’t get caught without coverage on those!

Make sure all of the property is covered by at least one of the policies.

Additions and Alterations

This coverage protects all the renovations you made to your unit. This could include things like:

  • Hardwood or stone floors
  • Kitchen fixtures
  • Crown mouldings

It’s essential that you ensure you have enough additions and alterations coverage to replace all of the investments put into your condo.

Loss Assessments

This coverage is unique to condo insurance. It protects unit owners from large building and common area repair bills that the master policy will not cover or may not have sufficient coverage to pay the entire amount.

For example: if the entire ventilation and heating system needed to be replaced due to a covered loss, then a individual condo unit couldn’t cover it alone (nor should they). The master policy may not have limits high enough to pay for the necessary work, either.

In this case, the condo association will assess a cost that each unit owner will need to pay in order to cover the expense for the building-wide repair. Loss assessment coverage will pay for your portion of this expense.

Contingency Coverage

This coverage protects your condo unit (as compared to the building and common areas) when the master policy fails to protect you, or if its limits are insufficient.

While many of the coverage options offered by a condo policy are similar to a home insurance policy, there are many condo insurance claims that work differently from home insurance that every owner should understand.

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