Condos and Townhouses are the conundrum of the housing world. They are individually owed, so they aren’t apartments, but they are different from free standing homes as well. Condos and townhouses come in all shaped and sizes. Similarly, Condo insurance policies can vary from community to community because they are written around the specific master policy that your association provides. It is important for you to have an insurance professional look over you condo policy, with a copy of the bylaws for the master policy to make sure that there are no holes in your coverage. Here are a couple things they will be looking for.
All about the Studs
A large part of condo insurance comes down to studs in, vs studs out. A common insurance analogy says if your master policy is “studs in” then if you took your condo and turned it upside down everything that stayed attached to the condo would be covered by the master policy. This includes cabinets, flooring, ceilings etc. Everything else would need to be covered in your personal insurance policy. If you have a studs out master policy, the policy only covers things from the studs in the walls out, so costs for items like flooring, cabinets, ceilings, would all have to be accounted for in your personal policy.
If you have studs in policy, and you make improvements to your condo like new floors or countertops, check with your master policy to make sure they will cover the improvements, otherwise you will need to increase your personal condo policy coverages to make up the difference.
Loss Assessment Coverage
Another important part of a condo policy is loss assessment coverage. Loss assessment coverage is in place to help condo owners pay their share of community losses. Say for example there is a fire in the community clubhouse. If the damages exceed what the master policy will cover the condo associate will divide the remaining coverage between all of the condo owners. Most Insurance Agents recommend increasing the standard $1000 covered to the maximum coverage of $50,000, that way if the association accesses you a large amount you can look to your personal policy to cover the majority of it. In most cases your standard deductible would apply.
Again, just like every condo is different so is every condo policy. For guidance on your own specific policy contact your customer service representative and they will be more than happy to review it for you.