Condos are valuable properties. If you are preparing to move into a condo, you may have a general feeling of excitement. Perhaps you are ready to move on to the next step, which is purchasing insurance. While shopping around, beware of these common condo insurance mistakes.
While filing a claim is an uncomfortable experience, having the right coverage in place can help alleviate stress. Many condo owners are left unprotected if a disaster occurs because they choose to add cash value reimbursement to their policy instead of replacement cost coverage. There is a huge difference between these two forms of coverage. Cash value coverage pays you the original amount for an item minus depreciation.
The cash value also factors in the item's life expectancy. If the value of your item has depreciated over the last few years, your loss may not be fully covered. Replacement cost coverage means that you will be reimbursed the exact amount you paid for an item if you have to file a claim. However, you may have to pay higher premiums.
It's no secret that most insurance policies are complicated. You may feel that it's a burden to read through an entire insurance policy before finalizing it. Skipping parts of the policy may cause you to agree to something you aren't actually ok with. Every part of the insurance policy is significant. Read over the entire document so that you aren't caught off guard in the future. Ask questions if you would like further clarification.
The cost of your premium is a significant part of your insurance policy. If you opt for a lower premium, that will increase your deductible, which may damage your finances in the future. If you ignore your deductible, you may not have the necessary funds in place to pay up to the point where the policy starts to cover you. Discuss your financial situation with your insurer. They should help you figure out which types of coverage you can afford while still being able to manage a claim. Your insurance agent may also notify you about potential discounts.
Condo insurance differs from traditional home insurance policies. Condo insurance covers potential property damage and liability disputes. The condo association has a master insurance policy that covers the exterior of the building. One of the more common condo insurance mistakes is assuming that the condo association coverage is sufficient.
Look over your condo association master policy to see if obtaining extra coverage is recommended. In some policies, specific issues such as plumbing and wiring problems are not covered. Full condo insurance coverage protects your personal items, liability issues, and damage to interior structures.
Only focusing on a policy's price has caused problems for many people during the claims process. Work with an insurer with an established track record of transparency and integrity. Working with an independent agent is also a good idea, as that ensures you will be able to assess multiple coverage options before making a decision. An independent agency can help you find a custom policy that aligns with your budget.
Another common condo insurance mistake is failing to purchase enough coverage. Sometimes people fail to understand the true value of their personal items or adapt their policy to their surroundings. Many condo insurance policies don't cover damage caused by a natural disaster such as an earthquake or flood. Some of your possessions may not be covered if you are a victim of theft. Working with the proper agent can help you find extra coverage such as flood insurance or a personal articles policy.
Condo insurance is recommended if you plan to rent your space to tenants. While your tenant may purchase renters insurance, condo insurance is still recommended to cover the entire structure. Condo insurance fills in the gaps between your master policy and the renters' policy. Adding extra liability coverage is also recommended.
While purchasing condo insurance is the right move to protect your investment, avoid some of the common mistakes that may cause a catastrophe in the long run. At Fuller Insurance Agency, we offer multiple types of condo insurance plans, which can be customized to suit your requirements and budget. Our condo insurance plans include coverage for personal property, liability, guest medical expense coverage, floods, earthquakes, and more. If you have any questions about your policy, contact our team of insurance experts at Fuller Insurance Agency to assist you.