Condo insurance will cover your property and possessions and is often required by mortgage lenders when you are buying a new condo.
Because the condo association’s insurance policy will not cover the interior of your condo or your other possessions, you must get additional coverage to protect your investment and assets.
Do you want to learn more about buying condo insurance? We have created this guide containing the top seven mistakes you need to avoid when you are buying condo homeowners insurance.
-
Choosing Actual Cash Value Over Replacement Cost
One of the biggest mistakes that condo owners make is choosing actual cash value for reimbursement rather than replacement cost. This will determine how you are reimbursed for things that are covered in your policy.
For example, if there is a natural disaster that damages your condo, your insurance coverage will replace the things that were damaged or destroyed.
With actual cash value, you will get the amount that you originally paid for the item that was damaged. However, your insurance policy will likely subtract the depreciation value, which means you will not get the same amount of money that you originally had to pay for your belongings.
Instead, it is best to have your insurance policy replace your belongings. This will ensure that you get your money’s worth in the event of a disaster, and your belongings will be replaced, new for old.
-
Not Getting Several Condo Insurance Quotes
When you are buying condo insurance, you should always ask your insurer for a condo insurance quote. This will give you an estimate of what you will have to pay for coverage, which makes it much easier to buy a policy that fits your budget.
While you shouldn’t only focus on price when you are selecting insurance coverage, it is still best to learn more about several different companies and their pricing.
At Harris Insurance, we are an Independent Insurance Agency representing over 150 top-rated insurance companies. With one quote request to us, we shop and compare every available market to ensure that we are presenting the best coverages with the best rates to our clients.
-
Getting a “Bare Walls” Policy
Another common mistake that condo owners make is choosing a policy with bare walls coverage. This is a policy that is often found in master insurance policies for your condominium association. It only covers damage to the walls, ceiling, and floors of your condo.
This means that other items in your condo will not be covered under your insurance policy. Instead, you need to find a policy that covers everything, including any potential build outs or renovations as well as your furnishings and personal belongings.
-
Not Getting Enough Coverage
When you are buying any type of insurance, you must be sure to get the right amount of coverage. Often, people will choose less expensive insurance policies to save money on their monthly premiums without noticing that they are electing to purchase half of the coverage.
Many condo owners also do not provide an accurate estimate of their possessions’ value. In these cases, you will have to pay a lot more out of pocket when something happens to your condo unit.
You can talk with your insurance agent to make sure you have the right type of coverage and enough coverage while still remaining within your budget. You may also need to purchase supplemental coverage for things like flood insurance.
-
Only Using Price to Decide on a Policy
While price is an important factor to consider when you are buying insurance coverage, it should never be the only factor you use to decide on an insurer. Many people choose insurers that offer the lowest premiums to save money.
However, this cheap coverage might not be worth it if you have to make a claim. In these cases, you could have a much higher deductible or will lack coverage in certain areas of your policy.
Instead of choosing solely based on price, you should do your research to find a high-quality insurance company. This way, you will have a trustworthy insurer that is still within your budget.
-
Purchasing for the Wrong Occupancy
Next, you need to be sure that you purchase condo insurance for the right type of occupancy. There are many reasons why you may own a condo, even if you do not live in it full time. For example, you may rent out your condo for extra income.
The type of policy that you need will differ depending on who is residing in your property. If you have the wrong policy based on the occupants of your condo, your claim might not be covered.
Make sure you update your insurance policy whenever the occupancy of your condo unit changes.
-
Ignoring the Fine Print
Finally, you need to carefully read the fine print when you are choosing a condo insurance policy. Many people make the mistake of skimming through their policy, but this makes it easy to miss errors.
Instead, you need to carefully read through your policy before signing it. Read it multiple times, as you may catch things that you didn’t notice the first time.
You should also discuss questions you have with your insurance agent. This way, you will know more about the specifics of your coverage and what is included in your policy.
Need Help Finding Condo Insurance?
Having the right condo unit owner’s insurance is necessary to protect your property. By avoiding each of these mistakes, you will be able to have enough coverage and find a policy that fits your budget.
Do you want to learn more about how to find the right condo insurance coverage? Harris Insurance can help! Our team provides everything from auto insurance to condominium insurance and more.
Contact us today to learn more about our condo insurance policies, to get other condo insurance tips, and to get a free quote for your condo insurance coverage.
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
