Condominium owners need to understand the difference between a home and a condominium to make sure their condominium is insured properly. In a condominium, of course, you own only your own unit. Condominium owners are almost never responsible for the outer walls and common areas of their condo, although of course it’s likely that your monthly condo fees go toward the insurance costs.
That said, though, you do need to know what your condo association’s master policy covers, in order to make sure that you’re insuring your own property accurately.
1. Know the Type of Condo Association Master Policy
There are two basic types of master policies that condo associations have. The first is termed “bare walls-in.” These will cover all the property from the outside frame inward. However, it does not cover fixtures and installations in the interior of the unit. So oven ranges and refrigerators, for example, are not covered by a “bare walls-in” policy.
The other type is termed “all-in.” It will cover fixtures and installations of the outer walls, floors, and ceilings of the unit.
As a result, if your condo association has a bare walls-in policy, your own condo insurance will need to cover fixtures and installations.
2. Know the Difference Between Cash Value and Replacement Cost
Condo insurance (and other forms of insurance as well) can be bought for the cash value or replacement cost of your items. With a cash-value policy, your policy will reimburse you for the cash value of the item, less what the depreciation has been. With a replacement cost policy, you will be reimbursed for the replacement value.
While a cash value policy may seem like the best value in terms of premium payment, it could actually cost you if you need to replace your items due to loss. Depreciation adds up. A depreciated stove, refrigerator, or flooring, for example, may be worth much less than their cost on the open market. As a result, a cash value policy’s payout could be much less than you actually need to replace the item. With a replacement cost policy, you will be able to replace them at no financial loss to yourself.
If you would to like to discuss your options for condominium insurance please call us at 561-732-9305 our quoting hours are Monday through Friday from 8:30 AM to 5:30 PM. In addition, you can request a quote online. Please remember, We Handle All the Work, While You Save!
Rob Macoviak is the President of Oyer, Macoviak and Associates. Oyer, Macoviak and Associates is the oldest independent insurance agency in Boynton Beach and has been in business since 1953.