Condominium owners typically have multiple insurance needs. Their needs are often similar to those of single-family homeowners but not completely identical. Condo insurance is uniquely designed to give Massachusetts condominium owners the coverages and protections that they require.
Like homeowners policies, most condo policies offer multiple coverage options. Condominium owners can often adjust these coverages for their particular situation.
What Coverages Are Included in Condominium Insurance Policies?
The exact combination of coverages found in condominium insurance policies can vary, but it usually includes at least three protections. Those three protections are:
Structural Coverage, which normally protects a condominium itself
Personal Property Coverage, which normally protects belongings and possessions
Personal Liability Coverage, which normally protects against certain potential lawsuits
Some policies offer additional protections, such as loss assessment coverage. Loss assessment coverage might help pay a special assessment that’s assessed as a result of a complex-wide incident.
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Do Condominium Insurance Policies Cover Earthquakes and Floods?
Most condominium insurance policies don’t protect against earthquakes and floods. Condo owners who would like coverage for these perils typically have to purchase a peril-specific policy. Earthquake policies may be found on the open market. Flood policies might be obtained through the National Flood Insurance Program or the open market.
What is the Difference Between Actual Cash Value and Replacement Cost Coverage?
There are two main types of personal property coverage that condominium policies might offer. Both coverages normally reimburse policyholders for belongings that are damaged, lost or destroyed in a covered incident, provided the belongings themselves were covered. The two coverages, however, can differ in how much reimbursement they provide.
Actual cash value coverage usually pays the fair-market value of covered items. This is frequently a depreciated amount that’s less than what the items originally cost.
Replacement cost coverage usually pays how much it costs to replace covered items. In many cases, this coverage offers better protection and will pay more than an item’s resale value.
