Why do you need Condo/Co-op insurance?

Why do you need insurance for the Condo or Co-op you just purchased? The association will most likely have a policy for the building itself, including the hallways, common areas and the exterior grounds. That policy will most likely end when it gets to the interior walls leading to your unit. “From the walls in” is a common expression used to inform unit owners of where their insurable interest begins.

If there was a fire that burned though a few units in a condo or co-op building, each unit owner would be responsible for replacing the interior walls, floors, bathroom and kitchens in their respective units. Have you priced what a new bathroom or kitchen costs these days? Marble, granite or special tiling is not cheap to replace nor are hard wood floors or kitchen appliances. The cost of increasing this coverage is only a few dollars per thousand. The typical New York apartment should have at least $50,000 worth of coverage in this area, often call “betterments and improvements” or “building property”.

These policies also cover your personal property for fire, theft and water damage. This includes your clothing, furniture, electronic equipment, books, rugs and sporting equipment. It is best to go room by room and do an inventory of what you have to make sure you have the proper coverage. Worldwide coverage is often offered under most policies so you can have peace of mind if you are travelling.

Do they cover me for liability insurance if someone were to get hurt in my apartment? Yes. Policies will have at least $300,000 worth of liability insurance and for about $50 dollars per year you can get coverage up to $1,000,000.

How can I save money on a policy? By having smoke detectors, dead bolt locks, an alarm system or a sprinkler system can get you discounts up to 5 to 10 percent.

Are there deductibles involved? Yes, like any other insurance policy there is a deductible. Deductible’s range from $250.00 to $2,000.00. The higher the deductible the less coverage you have but also the less premium you will pay. If you decide to buy high limits on your policy, taking a higher deductible makes perfect sense.

Jewelry, Cameras, Laptops? These items are covered on most policies but it is a good idea to schedule these items on a separate rider policy where they are covered for all perils such as breakage or mysterious disappearance.

What if there is a loss such as a fire in my unit and I cannot live there? The policy would provide for “additional living expense” whereby the provider would pay for you to live in a hotel until your unit was inhabitable again. Some providers will put a dollar limit on additional living expenses while others will use a time period.

No matter what limits you choose it is a smart thing to get insurance for one of the biggest investments you will ever make!