Insurance Options for Your Condo and Co-op
By USInsurance.com Staff
There is a dramatic difference between insuring a single-family residence and
insuring a cooperative (co-op) or a condominium. Similar to owning a
home, insurance is necessary for both types of properties to cover the costs
to your unit due to a robbery or fire and if someone is injured in your home.
When it comes to situations like a condominium or a cooperative, the condo
association or homeowner associate will have a policy for common grounds but
owners of apartments will need a policy to cover any losses within the actual
apartment. You definitely want to read over an association’s documents about
what is covered by the co-op board or association.
The paperwork for coverage of a condo or co-op apartment is commonly known as
H0-6 and coverage starts from the building studs within the walls. (Within the
insurance industry,
professionals have a series of forms developed by the Insurance Services
Organization; ranging from H0-1 to H0-8). These types
of homeowner's polices can also be purchased to protect your condo or co-op.
It is important to remember that insurance policies for condos and co-ops
only cover the outside structure of the building and common areas such as
hallways -- meaning that you have to find a policy for the space itself.
Homeowner's can go directly to a property and casualty insurer or they can
use an independent insurance
firm that serves as an agent. The cost of homeowner's
insurance will vary that is determined by two factors – location of the
actual property and an individual’s personal loss history that acts as a sort of
credit report. Insurers have an information sharing system to keep track of a
consumer’s past losses.
Consumers should look at their insurance
policies closely. Some insurers provide policies that are referred to as
comprehensive coverage, but they do not insure against all losses. Some losses
not covered include water damage caused by a flood or underground water, earth
movement such as earthquakes or mudslides and damage caused by settling (an
issue faced by older properties) or a nuclear hazard. Also, damage caused by
birds, rodents or domestic animals are not covered by insurance
carriers.
When it comes to personal liability, you can buy coverage if someone makes a
claim against you or brings a suit against you for bodily injury or property
damage for which you or a family member are responsible; in addition to
settlement costs this coverage may pay legal defense costs and court costs.
Medical payments coverage -- often $1,000 to $5,000 per person injured -- is
usually provided along with personal liability coverage.
In addition, covering building property insurance can be
purchased for personal property like clothes or furniture. It also provides
protection for personal property that you have with you while you are away from
home in many locations worldwide. You can also get loss of use coverage which
usually covers cost incurred when you cannot live in your home and need to pay
for a substitute place to stay, such as a hotel, if a major fire or tornado
damages your apartment.
If you own an apartment and rent it to others you should consider obtaining
renters
insurance. In this case you may want to get protection from loss of rental
income when repairs or replacements are needed for the apartment. If you find
that your apartment is in a building or neighborhood that has power outages you
can buy insurance to cover the loss of contents of a freezer or refrigerator
resulting from a power failure.
As is the case with all insurance policies, there are limits to what a
company will pay on certain items. Some companies have limits on rugs and
tapestries; whereas others may not cover damages to computers and firearms. Be
sure to research every plan and agent you are considering work with to be on
your way to the right insurance plan for you.
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