HO-6 insurance: How much condo insurance do I need?

Many individuals think that since the association owners have purchased insurance on the association they don't need insurance to protect their home. While it is true that the association owner will cover if your condo roof flies off, it will, however, not cover damage to any item inside your condominium. So, you need to get a separate coverage for your own safety.

A typical condominium insurance covers damage to your condominium, your belongings from perils like lightning, explosion, hail, windstorm, fire, civil disturbance, vandalism, theft, damage from falling objects, aircrafts or other vehicles and smoke.

To be able to determine how much condo insurance you need you must make a checklist of things you have to insure. You can begin by reading the master policy for the association. By reading the master policy you can find out what it covers and how much your condominium will be protected in case of any damage.

You can make a list of the things you would be responsible for like the flooring of your condo or the wall coverings, the plumbing fixtures, cabinets, any built-in appliances, lighting fixtures and any improvements made to your condo. Take some time out to add everything up to get an idea of home much condominium insurance you need.

Making a list of the personal property that you own would be a good idea to assess properly the amount of insurance you need to buy. Ask your agent for a content replacement option and how much it would cost you. Set your personal liability at a high limit to get a good amount of coverage. You could do the same for 'Loss Assessment' to cover you for big losses.

Master policy: Go through your master policy for the condominium to find out how much you are covered under that policy. Based on that you could assess what you need to cover to protect your condominium and your possessions from any damage due to a peril.

Deductibles: There is usually an association deductible in condominium insurance. So in case of a disaster be prepared to pay the deductible that will be divided amongst the unit owners.

Coverage required: Determine what you need to cover in your condominium and based on that draw up an assessment of the amount you need to invest in insuring your property.

Cash value or replacement cost: Find out which one you are opting for. A cash value will give you only the current value of an item minus the depreciation costs while a replacement cost would offer the total cost of replacing the item.

Interior structure and contents: Your association will not cover your personal property and the contents inside your condominium. You need to purchase coverage for the structure of your home and the contents inside your condo separately.

Flood and wind coverage: Make sure you buy flood if you live in a flood prone zone. Wind coverage is generally included in a typical policy.