Many condo owners question the necessity of their own insurance policy when their association already covers the building. This article delves into the crucial differences between association insurance and individual condo policies, often referred to as HO-6 policies, to clarify why personal coverage remains essential for protecting your unit and belongings.
Understanding Condo Insurance: Association vs. Individual Policies
Condominium associations typically carry insurance that covers the building’s structure and common areas like hallways, lobbies, and amenities. This means that if a major event, such as a natural disaster, damages the building itself, the association’s policy is intended to cover the necessary repairs.
However, this coverage generally does not extend to the interior of your individual unit or your personal possessions. This is where an individual insurance policy becomes vital.
The Importance of Your Own HO-6 Policy
An HO-6 policy is specifically designed to protect the contents within your condo unit. This includes your furniture, electronics, clothing, and other personal items. Furthermore, it provides crucial liability coverage, which can protect you if someone is injured inside your unit.
Key benefits of an HO-6 policy include:
- Coverage for Unit Interiors: Protects against damage to walls, fixtures, and finishes within your unit.
- Personal Property Protection: Covers your belongings against theft, damage, or loss.
- Liability Coverage: Shields you if someone is injured in your unit.
- Loss Assessment Coverage: May cover a portion of special assessments levied by the association for major repairs.
- Loss of Use Coverage: Helps with living expenses if your unit becomes uninhabitable due to a covered event.
Additionally, an HO-6 policy can cover improvements or upgrades you’ve made to your unit that the association’s master policy might not account for.
Key Takeaways for Condo Owners
- Association insurance covers the building’s structure and common areas, not the interior of individual units or personal belongings.
- An HO-6 policy is essential for protecting your personal property and providing liability coverage.
- Some condominium associations may legally require owners to maintain an individual insurance policy.
Making Informed Decisions
Before deciding to drop your individual policy, it’s crucial to review your community’s governing documents and the association’s master policy. Understanding what the building’s insurance covers and, more importantly, what it excludes will help you determine the appropriate level of coverage for your personal policy.
It is also advisable to shop around for the best value, considering that specific events like floods or hurricanes might necessitate additional coverage. While insurance premiums may seem like an added expense, the cost of repairs or potential legal fees in the event of a claim can far exceed the price of even the most comprehensive policy.