When purchasing a condominium, it is better to go for condo insurance. You can avoid unnecessary financial hassles if you have insurance in place. Compared to the other home insurance policies, condo insurance is slightly different. It is essential to have a clear idea of this insurance to decide whether to apply for one. We have discussed five important questions regarding this insurance to give you a better idea.
1. What is condo insurance?
When you buy a condominium, you purchase a unique property. Each condo has an individual owner, but each owns the building, the ground, and shared standard amenities. Generally, an association buys a master insurance policy to insure the building and shared area. The cost of this insurance is included as part of the homeowner’s monthly dues.
But there is one vital thing to keep in mind here. If there is any damage or issue inside the unit you own personally, the joint insurance policy will not cover the expenses. You will have to bear the cost. In such a scenario, the condominium insurance policy comes into play. For example: if there is a fire outbreak on your property or you would like to fix the flooring and cabinets, the condominium insurance will cover the expense.
2. Do you need condo insurance?
Well, this depends on how you plan to pay for the condo. If you plan to finance the cost by taking a mortgage, then the lender will ask you to provide them with the details of the condominium insurance. However, if you are purchasing the property by paying cash, there is no need to show the insurance policy.
But on the whole, it is a good idea to apply for insurance because it will help cover any damage or repair costs of your unit.
3. What is the difference between condo insurance and homeowner’s insurance?
The significant difference between the two is the amount of protection offered. Homeowners insurance provides broader coverage since it covers all the aspects of your property, from the land to the building structures or any injuries that the visitors might incur.
The condominium insurance falls under the HO-3 category, and the homeowners fall under the HO-6 category.
4. What are the different types of condo insurance?
Popular ones include personal property coverage that offers protection against water damage, firebreak, and so on. Some varieties go beyond the property coverage and will cover your expenses if you need to move out of the condominium during repair work. They will also cover the guest’s medical bill if they get hurt inside the unit.
5. What is the average cost of condo insurance?
The insurance premium varies depending on the condominium’s location, the building’s age, the property’s size, and the kind of coverage you are looking for. Moreover, your credit score also impacts your insurance amount.
To get the best deals, do a thorough survey about the different kinds of condominium insurance. This way, you can compare and decide which one to avail yourself of. For expert guidance, you can always get in touch with professionals like Geoff Bailey Realty, who can help you with every matter related to your property.