The Ins and Outs of Condo Association Insurance

condo association

Did you know that as of last year, the United States needs more than 5.2 million homes?

The housing shortage and rising costs lead more people to move into condos.

If you are planning to move into a condo, you’ll want to know all about the condo association insurance policies.

Keep reading to discover all you need regarding condo association master insurance!

Why Do Condos Require Insurance?

Before getting insurance, you need to understand why the condo association requires it.

Condos are in such high demand because the owners don’t have to worry about most maintenance issues. Shared amenities, contractors, and shared spaces all need to get maintained and paid for. When you pay for condo insurance, you are helping cover the costs of these factors.

For example, sidewalks, pools, and parking areas all need to get insured since accidents can occur. When multiple people live in a shared space, it can be difficult to determine who is responsible.

The condo association will select a policy that is most appropriate for the building and environment.

Public Spaces Can Be a Liability

Slip and fall accidents occur all the time, especially in the winter.

Condo association insurance is essential because the fees are used to prevent these issues from occurring. Typically, the insurance will cover the owner if someone falls and there were proper measures taken ahead of time to keep a clear and safe walkway.

Individual residents are only responsible for the items and utilities in their units. The insurance policy is meant for other areas, which is why multiple insurance policies are sometimes necessary.

External Damage

Not all incidents occur because of negligence or a failure to repair something.

Severe storms, tornados, and heavy winds can damage the condos or the buildings included with the association. The insurance policy is necessary to help cover for these costs so that the owners aren’t responsible for all the fees.

This means that if a tree fell on a condo, the unit’s owner wouldn’t be responsible. Just recently, outside of Chicago, storms tore through buildings and homes in town. The condo association insurance would likely cover the costs for repair since it was a natural disaster.

What Does a Condo Association Insurance Policy Cover?

Although agencies may vary in their coverage, condo insurance typically covers the same items.

All of the community amenities are covered under the condo association insurance policy. Public areas such as parking lots, elevators, and lobbies need to get covered. Other public spaces requiring insurance are tennis and basketball courts and belongings’.

It’s best to look for policies with “all-in” coverage so that your building structure and appliances are also protected. Single-entity coverage may not include walls and other items in the condos.

Another item the insurance policy covers are protection against getting sued. If you are at fault for someone having an accident in your unit, you will be protected. This can save you thousands of dollars and ensure that you aren’t responsible for other people’s actions if you created a safe environment.

How Does the Insurance Policy Get Paid?

When members of the condo pay their monthly dues, they are contributing to the master insurance policy.

Ultimately, the association is paying for the insurance through the money they get from condo owners and renters. Since the unit owners have equal access to the shared spaces on the property, they all contribute a similar amount.

How to Find the Right Insurance

Individual policies might protect you, but without association insurance, your needs won’t get met.

You must take the time to find the right policy for your needs and location. Picking the first policy you encounter can cost you more money than necessary or leave you to pay expensive bills after an incident occurs.

Below are a few tips for finding the best insurance policy and agency.

Know Your Needs

One of the first steps in finding the right condo association insurance policy is to identify your needs.

Without understanding your needs, you won’t know what to look for in a policy and could overlook important details. If you don’t want to be held responsible for someone’s medical bills after falling while drunk in your condo, you need to get a policy. Falling trees in areas at risk for severe weather are also a concern to consider.

Think about the risks around your home and try to identify what you need for your insurance policy. Talking to an insurance agent can help you discover if they have special policies to accommodate specific damage.

Review Local Options

Condo association bylaws can vary depending on the location, which is why you must limit yourself to local options.

Searching for local condo association insurance agencies will pull up some of the most relevant options in the area. This list offers a great starting point without having to drive across town, looking for insurance company signs.

The local newspaper and ads may also include condo insurance options. If your condo community displays or distributes condo newspapers, review them for some of the top options.

Check Online Reviews

Sometimes, the best way to find insurance for condo associations is by looking at online reviews.

Online review sites are typically free but offer valuable information. You can discover the flaws and benefits of each insurance policy without having to do all the research on your own.

Since some of the reviews will be negative, you must keep an open mind. Talk to someone from the agency to see if they’ve made any adjustments or changes to accommodate customers.

Compare Costs

Although costs are important if you’re trying to stick to a budget, the cheapest options aren’t always the best.

You can compare costs by looking at fees on insurance agency websites. If the agency doesn’t list their fees, you can request a consultation to get more details. You must set a firm budget before getting your condo so that you can afford all the insurance policies you need.

Talking to neighbors and friends in the condo community can also give you an idea of the prices you’ll be paying. Be sure to ask if there are any annual fees or if your policy will be a one-time payment.

Request a Quote

After you’ve narrowed down your options, you can request a policy quote from the insurance companies.

You can connect with an insurance agent in person or go online to request a quote. Most agencies will have you complete a request form that can get submitted in person or online. You can also request insurance policy quotes through some agencies’ websites.

Quotes are helpful when making final decisions on an insurance agency and policy. The best part about these quotes is they typically reflect the price you will need to pay.

Ask for Your Certificate

After you’ve signed a contract with an insurance agency, you should ask for your certificate.

A Certificate of Insurance will display the policies and underwriter. This is an important document that the property owner of the condo may request. You can refer to your certificate to learn more about your policy coverage and prove that you are currently protected under a policy.

Outdated policies won’t help if an incident occurs in a period of no coverage.

Other Types of Insurance to Consider

Aside from condo association insurance, there are a few other policies you might want to consider getting.

Home insurance for condos is often necessary. Home insurance covers personal liability and property, typically within the unit. These policies are often referred to as dwelling policies since they involve living units.

The HO6 insurance policy will be essential for most people living in a condo. The condo association’s HOA insurance will determine what gets covered by this policy. If you are renting a condo, you should also look into the HO4 policy.

Don’t Forget Your Condo Association Insurance Policy

Condo owners often get frustrated with insurance fees, but there is a wonderful purpose to them.

Condo insurance policies protect condo-unit and building owners from paying for expensive repairs. Since natural disasters and accidents are likely to occur, you don’t want your home to be overwhelmed with fixing damage or debt. The condo association insurance policy will cover public spaces around the condo so that everyone is protected.

Don’t be afraid to speak with someone from the insurance agency to learn more about their prices and policy coverage.

If you want to learn more about the condo association and insurance coverage for homes, read our blog for the latest info!

Jenny Wilson

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