Regardless of the type of property you live in, you must have insurance. While most people buy it only for homes, it is also wise to purchase it for new apartments.
This protects you from the high cost of replacing and fixing damaged features and destroyed belongings caused by storms, burglary or other unforeseen events.
Home insurance provides protection against personal injury liability lawsuits incase a guest is injured in your home.
Tenants in condominiums and apartment buildings need protection for their homes just as much as anyone else. A large number of condo unit owners do not have home insurance at all.
In addition, nearly two-thirds of renters have no protection. Furthermore, tenants and condo owners who do have policies are not thoroughly protected. These policies commonly lack coverage for emergencies like destruction and damage of a property from events such as floods and hurricanes.
If you do not currently have home insurance, you must seriously consider getting it. Find out more about condominium and renters’ insurance in the following overview.
What is Renters’ Insurance and What Does it Cover?
Renters’ insurance gives tenants many of the same protection benefits as homeowners’ insurance.
Many tenants believe the landlord’s insurance protects their homes and belongings, but this is not usually the case. Most insurance policies held by landlords only cover the apartment building itself.
Typical renters’ insurance policies provide protection against weather-related damage and human-caused harms like theft. The policies commonly provide a reasonable amount of personal liability protection as well. This means any nonresident who is injured on the premises receives coverage for medical expenses.
Compared to other insurance policies, renters’ insurance is relatively inexpensive. Tenants choose from one of several different policies, including:
- Actual Cash Value Policy. This is the least expensive type of renter’s insurance available. It covers items at their present cash value.
- Reimbursement Value Policy. This covers each of your belongings for the full amount it would cost to purchase a comparable, undamaged replacement item.
- Extended Value Policy. This permits you to insure your possessions for up to 25 percent more than the present worth of the items. This means you are protected against the effects of inflation.
- Supplemental or Floater Policy. With this policy, tenants buy specialized coverage for items that are not normally be included in a policy. With a supplemental or floater policy, you secure the full replacement value for expensive items such as jewelry and original artworks. Under different policies, these items typically exceed the maximum limit of insurance payout. If you collect art or valuable jewelry, it is worth the investment to purchase a supplemental policy or floater policy in addition to standard renter’s insurance.
- Additional Living Expenses Coverage. This provides renters with funds to help cover their living expenses in the event their properties are damaged to such an extent they are no longer habitable. This coverage allows you to live somewhere else while you wait for repairs to be done to your residence.
Get your belongings professionally assessed to secure the level of insurance you want for these valuables. This is especially true for expensive items. Typically, rare and expensive items like artworks and antiques must undergo a professional assessment to be covered by a supplemental policy.
In addition, renters’ insurance may only provide partial coverage for your more expensive belongings. This is due to industry-standard reimbursement caps. Make sure you know exactly what your renters’ insurance policy covers before you sign on the dotted line.
Learn About Condominium Unit Owners Insurance
Condominiums combine elements of both homeownership and renting. If you live in a condo, you own the unit, but you do not own the building containing those units.
Which elements of the condominium you are responsible for depends on your particular agreement. You may be responsible for all or some of the unit’s surfaces and fixtures as well as additional items like electrical wiring, water pipes and utility components.
Your condo unit insurance is partially covered by the insurance policies of your homeowners’ association. Typically, HOA policies insure the condo building’s exterior and offer injury liability coverage in case someone is injured.
For example, if someone slips and falls while using the complex’s pool, the HOA insurance policy covers this incident. The injury liability insurance does not protect someone who injures himself or herself inside a condo unit.
Apart from this, owners of condo units may not have any additional protection. As with renters, you must buy your own private policies to protect your belongings and to protect against injury inside the condo unit. Supplemental policies for condos may offer other key protections as well. These include:
- Loss Assessment Protection. If a condo complex is damaged, the condo unit owners are usually required to pay for the cost up to the deductible before the HOA insurance policy coverage makes any payouts. In addition, if there is serious damage to the complex and the repairs cost more than the HOA policy’s maximum limit of reimbursement, extra restoration costs are the liability of complex unit owners. For both situations, loss assessment insurance covers many of the costs. This saves you money and prevents you from becoming frustrated if serious damage is incurred.
- At-Fault Protection. If an owner of a condo unit is directly responsible for negligence causing damage or injury to a person in the shared spaces of the complex, the HOA policy may not cover the costs. By getting personal liability insurance, a condo unit owner avoids having to pay these costs.
- Flood, Hazard or Catastrophe Protection. Standard insurance policies often do not cover natural and human-caused disasters, such as earthquakes, floods and terrorist attacks. You must purchase a specialized policy to be covered against these disasters. If you live in an earthquake prone area, it is essential for you to receive this protection.
If you are a condo owner, make sure you know what the HOA policy covers and what it does not. Thoroughly review all the insurance options for your condo unit and complex and assess what you need for your own personal circumstances.
Both renters and condominium owners keep their homes, their belongings and their families safe by purchasing comprehensive and cost-effective policies.