When you buy a condominium, you are considered a homeowner, but in many ways owning a condominium is different from owning a single family home. A condo owner will have two separate stakes; their individual condominium unit, and the shared common areas and amenities of the building. The unit is owned by the homeowner while the common areas fall under a shared ownership with the building association where fees are assessed, and various rules are made in order to bring some cohesiveness to the condo owning experience. Unlike a house, a homeowner will not need to single handedly insure the building. This is taken care of collectively by the entire association. Condo owners should always take the time to review the association’s policy to assure that they are satisfied with the coverage offered.
Covering Your Unit
In Wisconsin, condominium owners are required to carry HO6 Homeowner’s insurance. H06 insurance has not always been required, but over the past several years it is required for condo owners who carry a mortgage in all 50 states as well as the District of Columbia. An HO6 policy is differentiated from a regular condominium insurance policy because it is the policy that covers the owner’s belongings in their condo beginning on the day they move into their unit. It will also cover improvements they make, such as buying new appliances or carpeting. The requirement for HO6 condo insurance came in response to the housing crisis that happened in the 2000s and was part of new regulations imposed by both FHA and Fannie Mae.
HO6 condo insurance offers limited coverage for individual unit owners with property, liability, medical, and living expenses. By law, the HO6 policy needs to cover $1000 worth of damage or loss that might occur due to various natural disasters, fire, theft, vandalism, and damage from falling objects or aircrafts. Wisconsin condo owners often choose the get more than the minimum amount of coverage in order to truly feel protected and prepared in case any of these scenarios actually happen.
Most condo owners carry around $100,00 worth of liability coverage that is designed to take care of damages or injuries that you or a member of your family household — including your pet– cause. In addition to taking care of others who are hurt due to your negligence, a personal liability policy will cover you if someone makes a specific claim against you and you need to defend yourself.
Medical Payments Coverage
Sometimes it isn’t easy to determine who has caused an accident, but bills still need to be paid while the details of fault are being sorted out. Medical payments coverage offers at least $1000 worth of coverage, regardless of who is at fault for an accident. An example might be a guest falling in the condo unit during a party, not because your home is unsafe, but because they were drinking and their balance was compromised.
Personal Property Coverage
Personal property coverage is for damages to property kept inside your home that belongs to you or other family members who live with you. The condo owner can choose how much coverage to purchase. Condo owners should carefully assess the value of their belongings before choosing how much coverage they want by taking inventory of their belonging and the value. While TVs and computers quickly make the list, many are surprised by how fast the “little things” such as clothes, pots and pans, towels, and even the toaster add up.
Although other condo insurance isn’t required, several other things are worth covering. Some of these include
- Loss Assessment Coverage – for the condo unit’s share of coverage for mishaps that happened in common areas.
- Reasonable Repairs – in order to fix damage caused by a qualifying situation.
- Trees, Plants, and Shrubs and Debris coverage – damages to landscaping, house plants or gardens would be covered here. Coverage for plants is usually limited to $500 per item, but it can add up quickly. Debris coverage will take care of the mess made by fallen debris.
Consider Flood Coverage
Many people mistakenly believe that flooding is covered under home owner’s insurance, however it is not. This includes condo owners. By keeping flood insurance policies separate, insurance providers can assess their client’s flood risk more accurately, and avoid driving up premiums for those who have less of a flood risk. If you feel the need for this protection, you should discuss it with your insurance agent.
Finding the Right Policy
Depending on what a condo owner values and the risks involved in owning a home in a particular area, what’s included in a condo insurance policy can vary a lot, and so can the cost. At Frydach Insurance, we work with a wide range of insurance providers that offer something for just about everyone. While you can research on your own, it is more beneficial to work with an agent who knows the market and can help you find the fit you need. To learn more about your condo insurance options, contact Frydach Insurance today.