Insurance Coverage for Our Family

Evaluations To Make Before Buying Personal Condo Insurance

20 July 2023

Christian Byrd

If you are part of a condominium, you need personal condo insurance and the condominium's insurance policy (the condo association's master policy). Ideally, your personal condo insurance should bridge the coverage gaps from the master policy. That way, the two can work together to give you complete coverage.

Take these steps before you buy your personal condo insurance.

Evaluate the Master Coverage Types

First, you need to understand the master policy your condo association carries. The master policy, which covers the physical structures in your association, comes in three main types.

1. Bare Walls-in

The bare walls-in policy covers your building's exterior walls plus the exterior walls of other structures that came with your home. If your condo has this policy, it will not compensate you if a fire damages your kitchen cabinets since those are interior fixtures.

2. Single Entity

A single-entity policy offers broader coverage than bare walls-in. This policy covers the exterior and interior structures, appliances, and fixtures.

3. All Inclusive

This policy covers your unit's exterior plus interior structures. Expect the policy to compensate you for damage to your appliances and fixtures. The policy extends to improvements you have made to the property, such as a new kitchen.

Understanding the master policy allows you to buy appropriate coverage. For example, you need a policy that covers your upgrades if your condo carries a bare walls-in policy. On the other hand, you may not need extra coverage for your upgrades if your condo has an all-inclusive policy.

Evaluate the Master Coverage Limit

All insurance policies come with policy limits, including condo master insurance. You must determine the difference if you suffer a loss and the master policy cannot cover it all. Know your association's policy limit so you can buy adequate coverage for your unit.

Consider a case where your condo has an all-inclusive policy with a limit of $10,000, and your upgraded kitchen costs twice that much. You need an insurance policy to bridge the gap between your kitchen's value and the condo's master policy. Otherwise, you might pay out of pocket if something damages your kitchen.

Evaluate Your Circumstances

Your circumstances determine your risk exposure, which determines the protection you need. For example, your condo's master policy won't cover your personal, so you need a policy with adequate protection for your personal belongings.

Similarly, some master policies may exclude outdoor structures you exclusively use. In such a case, get appropriate coverage for the structures – especially if you have several valuable structures.

To learn more about this type of home insurance, contact a provider near you.

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