Why Do I Need Condo Insurance

Frequently, condominium owners believe that once their mortgage is paid off they no longer need coverage for their unit. This confusion stems from a misunderstanding of what the condominium association’s master insurance policy covers. For the sake of argument, assume that the master condo association policy covers all units so if there is a fire your unit will be rebuilt. This is an all inclusive policy and only covers perils such as fires in the entire building. Individual unit owners are not covered for loss of personal property nor are they covered for personal liability. So, discontinuing coverage when your mortgage is paid still leaves you liable to replace your personal property on your own and assume financial risk should someone be injured while inside your unit.

What Condo Insurance Covers

Condominium insurance policies cover three things:

  1. Personal Liability
  2. Personal Property Replacement
  3. Replacement Dwelling

Personal Liability

Personal liability insurance protects you financially if your actions cause harm to someone else. Imagine you have a party in your condo unit. A friend has brought a date to your party. During the party the date trips on a chair leg and tumbles down the stairs. Because of the injury the date incurs medical bills and also loses time from work. You receive a letter from an attorney demanding that you pay $100 thousand dollars to cover medical costs incurred and anticipated as well as lost wages. If your condo insurance includes a personal liability limit of $100 thousand you are fully protected. Without the policy you will have to hire an attorney to defend you or negotiate a settlement that you will pay from your own pocket.

Personal Property

Personal property coverage protects you in case of fire or theft. It pays you to replace items such as appliances, clothing, furniture and art and jewelry within certain limits. Be careful when purchasing this insurance, replacement cost is different than cash value. Replacement cost allows you to buy a new dryer if yours was destroyed in a fire, cash value is the depreciated value of your dryer and will not be enough to replace it – you always want replacement value to keep you well covered.

Condo Dwelling Insurance

If your condominium association does not provide unit coverage then you need dwelling insurance. Say you have a grease fire in your kitchen and the kitchen cabinets are destroyed. Fire is a covered peril and this insurance will pay to have new cabinets installed and even to repaint your kitchen.

All three perils can be combined into a single policy. The coverage is relatively inexpensive and the peace of mind tor being protected cannot be valued.

Do I Need Earthquake Coverage?

Is Your Home Covered ? By Scottie McNelly

After the recent earthquakes in Oklahoma that some felt in Texas, you may have asked yourself if you’re protected from earthquakes by your home or property insurance policy. If you haven’t wondered, this is what you should know: Earthquake coverage is not part of your regular home insurance or property policy. You have no coverage for such an event unless you have bought additional earthquake coverage from your insurance company.

Most insurance agents have this coverage available as an optional package for your regular home, condo, renters, property, or dwelling insurance policy. Although insurance agents have not had to worry about earthquakes for homeowners, renters or property owners in Texas or Oklahoma, after the recent earthquakes that have occurred in Oklahoma, it sure makes us realize it can happen. And as an insurance agent, I want to be sure my customers know their options.

Adding earthquake coverage may be as simple as calling your agent and adding it to your policy. With some insurance companies, you may need to get a whole new policy in order to have this coverage. Take the time to call your insurance agent and find out your options. If your insurance is with one agent who only offers one insurance company, take the time to call an independent agent who has access to many insurance companies. An independent agent will be able to provide you with several choices.

The cost of the coverage varies between insurance companies. Since we are in areas that are not as prone to earthquakes as those in California or on the west coast, the price is not as high as it would be in areas that are prone to earthquakes.

Earthquakes occur all day long all over the world (see http://earthquakes.usgs.gov/). Most of them are not significant, but it only takes one occurrence to damage your valuable property or home. Make sure you know your options and get informed information from your insurance agent. Making smart choices for you is the key to have the protection you need.