Condominium and Renters Insurance

Homeowners’ insurance is considered a mandatory part of owning a home. It provides protection and insulation from the high costs incurred when a home or its contents are damaged or destroyed by adverse weather, burglary or other injurious events.

It also provides critical protection against personal injury liability lawsuits if a guest or service provider is injured on the property.

Individuals and families living in condominiums or apartment complexes need just as much protection for their families, possessions and legal liability concerns as homeowners. Yet a large percentage of condominium unit owners and nearly two-thirds of renters carry no private insurance for their properties or belongings at all. Furthermore, many of the homeowners and tenants who do have coverage hold only basic policies that are not appropriate or sufficient to meet their actual needs in the event of an emergency.

Learning about renter’s insurance, condominium insurance and renters insurance appraisals is an essential first step for anyone seeking to properly protect his or her home, family and belongings.

What is renters insurance and what does it cover?

Renters insurance extends to renters many of the same protections that homeowners insurance offers individuals who own their own homes. There is a common misconception among renters that the insurance policies held by their landlords or apartment complexes cover residents and their belongings in the event that the building is damaged. In reality, most complex and landlords’ insurance policies provide coverage only for the apartment buildings themselves.

Renters insurance exists to cover all other residential portions of renters’ insurance needs. Basic policies typically offer protection for renters’ personal belongings against both weather-related damage and some forms of human-caused harm, such as theft. They also provide a reasonable amount of personal liability protection. Personal liability insurance pays for the medical expenses of anyone who is not a resident of the apartment (e.g. a guest or service provider) who is injured in or on the premises.

Renter’s insurance is relatively inexpensive, and renters can choose between several different kinds of policies to match both the cost and the coverage to their own personal needs. For example, renters can purchase:

  • Actual Cash Value Policies. Actual cash value policies are the least expensive kind of renters insurance and cover items for their current, depreciated cash value.
  • Reimbursement Value Policies. Reimbursement value policies cover renters’ belongings for the full amount of money it would currently take to purchase a comparable item if the possession was lost or damaged.
  • Extended Value Policies. Extended value policies allow renters to insure their possessions for up to 25 percent more than the items are currently worth, which protects policy holders from the effects of inflation.
  • Supplemental or Floater Policies. Supplemental and floater insurance policies allow renters to purchase specialized or exceptional coverage for items or events that would not otherwise be covered. They also allow renters to secure full replacement value insurance for particularly expensive items, such as artwork or jewelry, that would normally exceed maximum insurance payout limits.
  • Additional Living Expenses (ALE) Coverage. ALE insurance provides renters with funding to help cover their living expenses if their apartments are ever damaged to the extent that they must temporarily live somewhere else while they are repaired.

Renters may be required to have some of their possessions professionally assessed by an expert before they can secure the level of insurance they want for them. Generally, items will need professional assessments if they are rare or expensive, or if they are to be covered by a supplemental policy.

Although renter’s insurance coverage options apply to many different situations, they do not cover every emergency that might befall renters. This type of insurance also does not offer any coverage for damages that are intentionally inflicted or that result from negligence on the part of the policy holder. Due to industry-standard reimbursement caps, renters insurance may also provide only partial coverage for more expensive items unless renters purchase specific supplemental policies or riders. Visit this page to learn what is not covered under renters insurance.

Condominium Unit Owners Insurance

Condominiums uniquely combine some aspects of homeownership with some characteristics of renting. Those living in condos own their units, but they do not own the buildings those units are located in. Depending on the details of their purchase arrangements, they may be responsible for some or all of the fixtures and surfaces in their units, as well as the maintenance of pipes, electrical wiring and other relevant utility components.

In the same way that renters are partially covered by their landlords’ insurance policies, condo unit owners enjoy a small degree of coverage from the insurance policies their homeowners associations (HOA) purchase. HOA policies typically insure the exteriors of condo buildings and offer injury liability coverage in the event that someone is injured in a communal complex space. For example, if a complex roof were to be damaged in a storm or if someone were to slip and fall while using the complex swimming pool, the HOA policy could be expected to provide insurance coverage.

Beyond that, however, condo unit owners cannot count on any additional protections. Like renters, they must purchase their own private policies to protect their belongings and contract personal liability insurance against the possibility of someone being injured in their unit. Condo insurance and supplemental policies may also offer several other key protections.

  • Loss Assessment Protection. When a condominium complex sustains damage, condo unit owners must pay for those damages up to the complex’s deductible before the HOA’s policy coverage will begin to make payouts. If a complex is seriously damaged and the repairs cost more than the maximum reimbursement limit on the HOA’s policy, any additional restoration costs above and beyond that limit will be pushed to unit owners to pay. In both of these cases, Loss assessment insurance can cover some or all of those costs, preventing condo unit owners from being forced to pay them out of pocket.
  • At-Fault Protection. If a condo unit owner is found to be directly or negligently responsible for damage or injury to another person in the complex’s shared spaces, the HOA’s insurance policy may refuse to pay for the resulting costs and require the condo unit owner to cover them instead. Private personal liability insurance can cover these potentially high costs.
  • Flood, Hazard or Catastrophe Protection. Floods, earthquakes and human-caused disasters such as nuclear or terrorist attacks are routinely excluded from standard insurance policies. Condo unit owners who are concerned about such events must purchase specialized insurance policies to ensure they and their belongings will be covered.

By thoroughly reviewing condo insurance coverage options and objectively assessing their personal needs, both renters and condo owners can put together cost effective and comprehensive insurance coverage that ensures the safety of their homes, families and belongings.

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