Over the past year, the average price of a condo has risen by approximately 9%. The demand is increasing, as people are realizing just how great of an investment a condo is. If you are a condo owner or are considering purchasing one, do you know how to cover them in the event of an accident?
When purchasing a condo with a homeowners association, it can be difficult to determine who is liable for what. Read on as we answer the question “What is condo insurance?” and let us tell you how to get the best deal.
What Is Condo Insurance?
Condo insurance is coverage for homeowners who have a property under a co-ownership regime. It differs from normal residential property insurance, as the rules of ownership are different. Some items may not need insurance as they are covered under the insurance of the Strata Corporations.
Personal condo insurance covers your personal possessions inside the property, improvements made to the unit, additional living expenses, or personal liability.
Commercial policies are also available for the homeowners association itself, covering the condominiums in the building instead of the individual.
Strata and Personal Types of Condo Insurance
There are some fundamental differences between strata and personal condo insurance. While you may only need personal condo insurance, it helps to understand the difference and know what is included in your policy.
Strata insurance covers the building and its common areas. This includes corridors, swimming pool areas, laundry areas, foyers, stairwells, and elevators. It also covers legal fees for any accidents that occur to the public as a result of something building-related.
Personal condo insurance covers the individual unit and its owners. This covers personal items such as your electronics, furniture, documents, and other personal belongings. Many people believe this is already covered under the strata insurance, however, it is not.
What Does Condo Insurance Cover You Against?
Among other things, it will protect you against loss of your contents and any unit improvements you make. Therefore, it is important to document what you have and keep receipts for any upgrades you make.
An insurance claim can be made as a result o f several instances. These include, but are not limited to fire, floods, storms, electrical damage, water damage from brown systems, and theft. These policies can also have other optional coverages added to them, depending on your needs.
Optional Coverage
If your home is damaged, it is likely that some of your personal belongings were ruined as well and may need to be replaced. This can include items such as electronics, jewelry, artwork, furniture, and more. The coverage amount for your contents (also referred to as personal belongings) is usually 70 to 80% of the building value.
Flood Insurance
Flood insurance is not always included in condo policies. However, some mortgage lenders may require you to purchase it as a condition to lending you money. To make matters worse, some flood-prone areas may find it hard to get flood insurance at all, given the likelihood the area will experience a flood.
Loss Assessment Coverage
Loss Assessment covers you if you need to pay your part of common areas. For example, if the laundry room is damaged and you have to pay for part of the damage, the loss assessment coverage will step in.
Loss Assessment may be charged to you if you are found liable for the loss as well. For example, if you cause the fire and it burns down the building, you can be assessed 100% of the fire deductible.
Vacant Condo Insurance
Properties that are left vacant are considered high risk. When no one lives in a property, that property is far more susceptible to burglary, and problems that when unnoticed, may cause further damage. As such, your policy will likely not cover you should you leave your condo vacant.
If your place is without occupancy for 30 days or more, speak with your broker. They may need to adjust the policy to reflect the fact that it is considered vacant.
Condo Insurance Quotes and Prices
The average cost for condo policies can vary depending on discounts the insured can claim, such as claims-free, age-related, and soft credit checks. In short, the average is around $30 to $50 a month.
The price will increase as you add on optional extras or increase coverage limits. Don’t skip out on things you may need in the future just to save money. If an accident does occur, it could cost you much more in the long run.
Ways to Lower Your Costs
There are ways to make your condo insurance premium cheaper. Of course, this often comes at a cost to your coverage. If you are on a budget, try some of the following ideas.
You could start by increasing your policy deductible. This is the amount you will be responsible for before the insurance company adjusts the claim and covers the loss of your possessions and other eligible policy items. For example, if your deductible was $500 and the damage was $2000, you would pay $500, and the company would pay the other $1500 in the event of a covered claim. .
Finally, make sure you leave yourself plenty of time to shop around. This means speaking to insurers about other offers and working to customize the policy. All of this will ensure you get the correct price.
Finding a Provider
Now you can answer the question, “What is condo insurance?” and you know how important it is. Make sure you speak with your strata corporation to check what they cover. Then leave plenty of time to shop around and find the best deal.
Your first stop for Condo Insurance should be InsureBC. We can protect your townhouse or condo investment. Click here to shop online and get your insurance quote in minutes.
