If you've bought a condominium, do you still need homeowners insurance? Yes! You need specialized condo insurance to protect your home from what your condo association doesn't.
Seniors' Quick Guide to Condo Insurance
So you've taken the next big step after retirement. You let the over-sized family house go and downsized to a neat little condominium just perfect for two. No more huge house to clean and repair, no lawns to mow, no snow to shovel. And no more homeowners insurance.
Wrong! It's an understandable mistake that far too many new co-op and condo owners make. They think their condo association insurance covers any losses to their new home. It's not until they have a kitchen fire, the bathroom floods or a visitor slips and cracks their head on the kitchen counter that they find out they're not covered for these kinds of losses. And by then it's too late. They have a huge financial bill on their hands.
Here's What you Need to Know About Condo Insurance
Although there's some variance from state to state with condo insurance requirements, most associations are only responsible for insuring the main structure of the buildings and covering against liability losses in common areas like lobbies, pools, and parking areas. Their responsibility usually ends at the exterior walls of your unit.
Covering everything inside those walls is your responsibility, so you still need homeowners insurance. There may even be a requirement in your association's by-laws that you have it. And if you bought your condo with a mortgage, your bank or other lender will require condo insurance to protect their investment.
Condo Insurance Advice for Seniors:
1. Read the "Declarations" portion and by-laws of your condo association documents to determine what's covered by their insurance—and what's not. It will usually cover all common areas, like the roof and elevators, the boilers, walkways and garage.
2. Determine how much it would cost to repair or replace everything within the exterior walls of your unit—new drywall, wiring, plumbing, lighting fixtures, cabinetry, paint, carpets and drapes, etc.
3. Determine the value of your personal possessions—your clothes, furniture, electronics, tools, kitchenware, everything not attached to the condo unit. If you have expensive items like jewelry, paintings, furs and heirlooms, list their value separately, since you'll need a separate "floater" policy to cover their replacement.
4. Decide how much liability coverage you need. This will cover accidents to anyone inside your unit, but it will also protect you from having to pay out large sums when your dog destroys a common area, your bathtub spills over and damages the ceiling of your downstairs neighbor, or your grandson puts a baseball through the lobby window.
5. Armed with these numbers, talk to your insurance agent. Or compare quotes from several companies online at a site like InsWeb.com to find the insurance coverage you need. That way, you'll find the best rates on condo insurance.