Your homeowners' insurance policy provides you with financial protection against disasters. Most policies protect both home itself and the things you keep in it.
Most homeowner insurance policies come in the form of a package policy. This means that a typical policy will cover your home, possessions within the home and injuries. This can also include damage caused by household pets.
Not all insurances policies are created equally. Depending on the region you live in, some natural disasters are not covered by a standard policy. For example, damage caused by floods, earthquakes and other inclement whether may not be covered within your policy. In this case, you may purchase separate policies for things not covered. Most insurance polices will not cover maintenance related damages.
Condo and Co-op Insurance
Your association fees do not protect the property within your condominium. Your condo fees help cover the building insurance, which is a part of a master policy but it does cover not your personal property housed within your condo itself. For protection against burglary, damage from fire or other disasters you must purchase condo insurance, or type HO-6, which is a home insurance policy designed specifically for condos and co-op apartments. Some others things covered by HO-6 insurance may include:
- Lightning Damage
- Windstorm or hail
- Explosion
- Vandalism
- Water leakage due to weight of ice or snow
A basic condo/co-op policy should also provide liability protection for incidents, such as someone tripping and falling while in your unit. In addition, if a covered peril should make your condo or co-op uninhabitable, your policy should include a provision to cover the additional living expenses you incur when you have to temporarily live somewhere else.
Options to Ask About
When you speak with your insurance agent, be sure to under the following terms and conditions related to your specific policy:
Cash or replacement value: You can insure your personal possessions for either the cash value or their replacement cost. With cash value coverage, you receive the value of the item minus depreciation, while replacement value pays the current cost to replace the item.
Deductible amount: What level of deductible can you afford? A higher deductible can mean lower insurance premiums but if something happens, be prepared to pay out that high amount.
Unit or loss assessment: If your co-op or condo building is damaged by an insured disaster or its members are sued and the cost of that damage is not fully covered by the association's policy, this type of coverage would pay for your share of an assessment charged to all unit owners.
Flood or earthquake: Most standard homeowners' policies do not include coverage for either floods or earthquakes. If you live in an area where either might occur, consider adding coverage.
Floaters: Most policies set limits for items like jewelry, collectibles, and computers. If you own expensive items, you can pay extra premiums to have those items fully insured under what is called a floater. Without a floater, a policy will cover such items only under general categories and offer reimbursement up to a maximum of only a few thousand dollars (limits vary).
Discounts: Insurance companies offer an array of discounts. Factors that could reduce your premiums include smoke detectors, alarm systems, deadbolt locks, closed-circuit television, a secured-entry system or a doorman. If you insure your unit with the same company that underwrites your building's insurance policy, you might get an additional reduction in premium. You could also qualify for a multi-line discount if you purchase your condo/co-op and auto insurance from the same company. More discounts might be available depending on your age or whether you're a non-smoker. Building location and amenities also play a role in your rates. Typically, the better quality and newer the dwelling, the lower your premiums will be.