What You Should Know
Congratulations! You own a condominium. You know everything about the condo and surrounding complex (on-site gym, swimming pool?) that made you fall in love with it. Now it’s time to know about condo insurance as well as you know your new home. It’s that all-important layer of protection you’ll need should something unforeseen and unexpected arise. Here are some of the mistakes new condo owners make when buying insurance. Even before you purchase your condo, understand what NOT to do, and you’ll be a well-informed homeowner.
- DON’T get a “bare walls-in” master policy. “Bare walls-in” only covers everything inside the condo, but not bath or kitchen fixtures, floors, or architectural details within the condo itself. If you have “all-in” coverage, you won’t have to worry should something shatter your granite countertop in the kitchen. Often those with only “bare walls-in” coverage will have to purchase additional coverage to make sure they don’t have to pay extra if any of these interior things get damaged. However, as with all things relating to insurance policies, it may depend on your budget as to which coverage you can afford. But if you want greater protection, “all-in” is the way to go.
- DON’T choose cash value over replacement cost. In your policy, you’ll likely have the option to choose one or the other. If a major appliance breaks, and you’ve chosen cash value, you’ll receive the amount that appliance cost when you originally bought it. That means it could be worth much less if the appliance was purchased several years ago. If, on the other hand, you choose replacement cost, you’ll receive enough money to buy another appliance. Going with cash value may not leave you with enough money to replace what you lost.
- DON’T be turned off by high condo association fees. Okay, sometimes the fees are just too high for your budget. Period. However, condo association fees contribute to covering the costs for damages to the communal areas of your condo complex. For instance, if someone sprays graffiti on the outside walls of the building, there will be enough funds to have it painted. If there is damage to the parking lot, sidewalks, any common areas shared by all. As a condo owner, your main concern is what is inside your condo. But since you’ll be part of a community, you’ll want there to be funds to take care of the rest of the property. Your condo association fees should go to those costs.
- DON’T sign any policy without reading the fine print. Yes, sometimes there is so much to read in contracts that you may be tempted to go ahead and sign. An insurance broker like the professionals at Zawada can help you to better understand your policy before you sign anything. What’s most important is that you know what you’ll be responsible for and what your insurance covers. For instance, most condo insurance policies cover situations like burglary, but you’ll want to make sure that’s included. Personal property coverage is usually required to cover the cost of personal belongings that have been stolen, such as jewelry and other valuables. You’re your policy so you’ll know if that’s included. Also, liability insurance will protect you if someone is injured inside your condo. It will cover medical costs if someone has fallen on your tile floor or other type of injury.
- DON’T ignore the cost of your policy or the deductible. This is the biggest mistake you can make. Is your deductible too high for your budget? And what is considered a reasonable deductible for your particular property type and policy? Answering these questions is made easier when you consult with professionals who can tell you what IS and what ISN’T typical, so you’ll be alerted to any red flags. For example, your condo association’s master policy may have a $5,000 deductible. If there are only ten condo owners, you’d have to pay $500 to cover common property damage. If, however, there are twenty condo owners, each owner would only have to pay $250. Please note—deductibles can go as high as $50,000 in some cases. So know what the costs are before you buy! Also, condo insurance can vary from $100 to $400 a year, so make sure whatever you choose is within your budget.
For all your home, auto and other insurance needs, please contact Zawada Insurance Agency. We work to give you comprehensive coverage at a competitive price.
Zawada Insurance Agency, Inc. is a family-owned and operated independent insurance agency, located in Worcester, Massachusetts, serving central Massachusetts and beyond.