4 Prospective Questions About Condo Insurance

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Not all living structures are created equal. While homeowners have to think about basements, attics, yards and the like, condo owners have a list of other considerations. That’s why it’s essential for your clients to understand the differences between condo and homeowners insurance. As an agent, the best thing you can do is prepare for the prospective questions regarding condo insurance that may be thrown your way. Not sure where to start? Below are four questions a new condo owner may ask.

Am I only responsible for covering my individual condo?

Condo owners typically own just one unit of a condominium complex and share ownership of the common areas of the complex with other owners. From the viewpoint of an insurance agent, this means that every individual owner has a responsibility for their own personal unit, but all share a collective responsibility for the common areas within the complex.

But just how much responsibility do condo owners have when it comes to these common areas? All condominium complexes differ — but that’s where the condo association’s master policy comes in. This includes all association rules and spells out which parts of the complex are insured through dues, and which parts are not.

When discussing condo insurance with prospective clients, it’s important they fully understand their master policy so they know how much coverage they need.

How much coverage do I need?

Every condo owner has different needs, so it’s important you effectively guide them toward what’s right. A new condo owner may not know that he or she is responsible to insure everything that’s within the four walls of the individual unit. One way to help you determine the right coverage amount for your client is to research and try to find out how much other owners in the complex paid for recent upgrades (think flooring, countertops and the like). Another method for estimating coverage is to look at the market value of other interior structures of units within the complex and then divide that number in half. This determination would then cover to replace interior items like flooring, cabinetry, etc.

How much does the association deductible cost?

Typically, a condo association master commercial policy covers the shared areas of the complex – the roof, outside wall and other common areas. Policies like this also typically include an association deductible — meaning, in the event of major damage to the structure, the deductible would be assessed against each owner. If your prospective client asks you questions regarding association deductibles, it’s important to ensure they understand that they could be responsible for association deductibles if something does go wrong.

Do I need to insure contents and structure?

It’s important for prospective clients understand they should have coverage for both contents (think furniture, electronics and other valuables) and structure (think cabinetry, flooring and lighting). Unlike homeowners insurance, your clients should understand that condo insurance is really built off of their contents, rather than the structure.