Condo Insurance: Four Steps to Full Coverage

Piecing together the puzzle that is a condominium insurance policy can be tricky. As a condo owner, your insurance needs differ from those of a single-family homeowner. Understanding those differences is key to making sure that you get the maximum protection from your insurance coverage.Here's some advice from Eric Sharfstein, claims director with National Insurance Underwriters, about what to look for in the fine print before you sign on the dotted line of a condo insurance policy.1. Understand what you're responsible for and what the condo association coversThe key difference between homeowners insurance and condo insurance is the coverage for the structure. Since condo owners do not own the actual building themselves, only the unit they occupy, they typically insure their units "from the walls in." The condo association's master policy covers the larger structure.In case of a fire, for example, the condo owner's policy would cover damage to the interior wall finishes but not structural damage, which would be covered under the condo association's master policy. The master policy usually also covers the common areas (such as hallways), grounds and building systems.2. Make sure you have adequate coverageIf the condo association (via your monthly dues or common charges) is responsible for insuring what's outside your unit, you are responsible for insuring everything inside your unit. Typically that includes structural elements -- kitchen and bathroom fixtures and interior appointments, such as carpet and hardwood floors--as well as personal property. Your policy should address both types of contents.Most policies also cover the costs of additional living expenses necessitated by a covered loss. In the case of the fire example cited above: If the unit was unlivable, the policy would cover the costs of temporary shelter, meals, etc.3. Choose replacement-cost coverage for your personal propertyWithout replacement cost coverage, the insurance company will pay only the depreciated "actual cash value" of your personal property. But chances are, you will want to replace old items with new ones, especially when it comes to electronic devices such as TVs and computer equipment.4. Check on liability exclusionsYour condo insurance policy should include liability coverage. If someone falls or is injured in your condominium unit, the policy covers the damages that the injured person is legally permitted to recover.Increasingly there are exclusions to liability coverage, so check your policy carefully. Many insurance companies now exclude animal liability, so if a guest is bitten by the family dog, for example, there will be no coverage. Other exclusions may include swimming-pool liability. If your condo unit has its own pool, consider an additional liability policy to protect you against accident claims.Reading and understanding your condo insurance policy is essential to ensuring that you're protected to the max and can face whatever situation arises armed with the most complete coverage available, says Sharfstein. He recommends visiting fmap.org to get competitive insurance quotes and do some comparison shopping. Also good is the website of the Florida Office of Insurance Regulation, which has a consumer link with useful information.