Many people would consider a condo as something between a house and an apartment. If you’ve recently purchased a condo, you may wonder if you need to buy homeowner’s insurance. The answer is yes, but you will need a special type of coverage. Keep reading to learn more.
Do You Need Insurance for a Condo?
If you take out a mortgage for your condo, you will probably need to purchase insurance. Most lenders require it. If you have a mortgage, then the insurance protects the interest of the bank if something happens to the condo. Therefore, unless you’re able to buy the condo outright, insurance is likely mandatory.
However, you cannot simply buy a home insurance policy for a condo and call it a day. There is condo insurance, which is like homeowners’ insurance (but for condos). There is also the matter of joining a condominium association. You will probably only need to purchase condo insurance to cover your unit. You will then pay monthly fees to the Condominium Association. The association handles buying an insurance policy to cover the pool, the hallways, and other common areas.
What Is an Individual Condo Insurance Policy?
An individual condo policy also referred to as a unit owner’s policy is what you are responsible for purchasing. You will probably have to buy an individual condo insurance policy if you take out a mortgage for a condo unit. The unit owner’s policy will provide you with liability protection in the event of an accident in your condo. It will also cover your personal belongings and furnishings in the condo that are your responsibility for upkeep.
What is a Master Condo Insurance Policy?
The master condo insurance policy is what the condominium association buys. The association will cover the cost of a premium by having condo unit owners pay association dues or maintenance fees. Usually, all residents must join the association. This policy covers property damage coverage for the hallways, the roof, the elevators, the recreation rooms, the stairways, the pool, and other common areas. While these are areas you use, they don’t belong to you personally. The Master Condo insurance policy also covers general liability for the association.
Before you buy an individual condo insurance policy, check the master condo policy to determine what is already covered. In particular, you want to check that the master condo policy covers wind or flood damage. Otherwise, you will need to purchase a unit’s owner policy that covers these risk areas.
Buying a condo insurance policy should be at the top of your to-do list when purchasing a condo. Whether you have a mortgage for your condo or not, you should consider purchasing condo insurance for your home. Call (915) 599-2900 now or visit us at www.MtFranklin.com for more information.
