For many, investing in a condo is an exciting step in life. Condos give you the best of both worlds — the freedom to modify the inside as you wish and less upkeep than an apartment. Now that you have a new home, you want to do all you can to keep it safe. Condo insurance is a great option for new owners, but what exactly does it cover?
Essentially, condo insurance protects your property and possessions. It is a type of insurance specifically for condo owners. This type of insurance will cover damage to your property and possessions caused by an event. For example, the policy will cover you if your valuables like jewelry are stolen or if a natural disaster causes damage to the exterior of your condo.
Condo insurance can protect you from financial stress caused by various mishaps and choosing the right policy can be confusing, which is why many people make mistakes when deciding on a policy. Avoid making costly mistakes when it comes to buying condo insurance with these 6 tips:
1. Not having enough knowledge about condo insurance
First and foremost, not having enough knowledge about condo insurance can lead to choosing the wrong policy. Condo insurance policies protect you from certain losses in the event of unforeseen circumstances, so you want to be sure you’re choosing the right policy!
To do this, be sure to review a copy of your HOA’s Master Insurance Agreement and ask your trusted insurance agent to review it and advise you of loopholes. We offer assistance to help you find the insurance service that is most appropriate for your needs here.
2. Choosing cash value over replacement cost
Natural disasters happen, especially in Florida, and even though you hope you’ll never be in the position to file a claim, it’s always a great idea to be prepared for the unexpected. Unfortunately, many condo owners make the mistake of choosing a cash value reimbursement instead of the full replacement cost.
If you’re unfamiliar with these terms, cash value means you’ll be reimbursed for the original amount you paid for an item minus depreciation based on the life expectancy of the item claimed. While this may sound like a good idea, it might not be enough money to have the item completely replaced due to depreciation incurred at the time of loss. For example, consider the price of a car five years ago and the cost of buying one today.
Cash value reimbursement may help you lower your insurance premium, but you may end up paying more money than you would have before. We suggest speaking to your trusted insurance agent about options for replacement costs and lowering your premium costs in the event you need to file a claim. This option may have higher premiums, but it’s more likely to provide you with sufficient coverage when you need it.
3. Solely focusing on the cost of the premium
You don’t want to let your fears about the cost of insurance keep you from getting the coverage you need. A very common mistake many people make is that they only look at the cost of the premium when selecting an insurer. While cost is a major factor in choosing a policy, a lower premium often leads to a higher deductible, which may take a hit to your finances if your condo is severely affected in the event of a total loss.
What you should do instead is talk to your trusted insurance agent about which policies are the most affordable for you and have a relatively low deductible. We suggest being as transparent about your financial statement as possible so your agent can help you reach a decision that is best suited for your needs and budget. And the good news is that you can always remove unnecessary coverage to lower the price of your premiums. You might even be eligible for discounts that will make your premiums more affordable!
4. Skimming over the terms of policy
We understand, insurance policies can be complicated and the fine print tends to be long and boring to read. Many policy owners tend to skim through the terms and sign before they actually understand what they’ve read. This mistake could mean you’ve agreed to terms you’re not even aware of.
We suggest taking the time to read the entire policy and ask your insurance agent questions about the terms you don’t understand. Most insurance policies list exactly what is covered under the policy, but be aware that many policies do not cover natural disasters like earthquakes or flooding. You’ll also want to be aware of what is covered in the event of a burglary. Any items that are not included should be added as a rider with a personal articles policy.
5. Not getting sufficient coverage
The most common mistake made during the purchase of an insurance policy is not getting enough coverage. Condo owners often fail to accurately consider the value of their possessions or don’t get enough coverage for events that are most likely to occur in the local area. As a result, they end up paying a lot when an event that their policy doesn’t cover, such as a burglary or natural disaster, occurs. On top of that, legal terms can be confusing and many people take an all or nothing approach when it comes to purchasing insurance.
To prevent insufficient coverage, we suggest selecting an “all-in” policy because it covers most options regarding condo insurance. Get in touch with your trusted insurance agent to select the coverage you want to include. There are a variety of coverage options and deductibles to choose from that we can tailor to fit within your budget.
6. Relying on the protection of your HOA
A great advantage of condo living is having a Homeowner’s Association, also known as HOA, to maintain the exterior of the property. The HOA typically insures all exterior structures, however, this can vary from one HOA to another so don’t assume that they will cover everything. We suggest reading over your HOA’s details in your community’s master policy to see what is covered. Meet with your trusted insurance agent so they can help you find supplemental insurance to cover anything that is not already covered by your HOA to assure that your home is protected.
How to find the Perfect Condo Insurance Policy for you
We get it, there are many types of condo insurance policies available, and purchasing the right coverage can seem difficult and expensive. A trusted insurance agent can help you understand the terms of each type of condo insurance and offer advice to help you find the right coverage for your unique needs and budget. At the Webb Insurance Group, we will provide you with a quote for a condo insurance policy to keep all of your assets protected. Our experienced insurance agents are available to answer your questions, provide information about our insurance policies, or provide you with a quote. Contact us today to learn more about how we can assist you!
See how much you can save on your insurance policy! Our staff is available to ‘live chat’ with you during regular business hours, just click here to start a conversation.