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Insurance Tidbits:
Is Your Condominium Insured?
You are the proud
owner of a condominium. When you closed escrow, you were required
to prove that there was insurance covering the building to protect
the mortgagee. Through your Condo Association, you were able to
show the necessary coverage. But is this coverage sufficient to
protect you? The answer is probably not.
To best illustrate
this concept, consider the scenario of a fire that seriously
damaged your unit. In this situation, you may face several loss
exposures including:
·
Damage to the building. In most cases, your
Association’s policy would cover these losses.
·
Damage to the interior of your unit including
upgrades that you made (wallpaper, carpeting, draperies, cabinets,
etc…). Coverage depends on your Association’s CCRs. Some
provide coverage for interior fixtures that are permanently
attached, while others only provide coverage for your walls, but
no fixtures. In most cases, any upgrades you made are not covered
by the Association.
·
Damage to your belongings (clothes, furniture,
electronics, etc…). Your Association’s policy does not
provide any coverage to repair or replace your belongings.
·
The additional cost to live elsewhere while
repairs are being made (Remember- your loan payments will still be
due every month). Your Association’s policy does not cover
any extra expense you incur to move or live elsewhere.
·
Your liability if the fire began in your unit and
damaged others. Although the Association will pay to repair
the building, they may hold you liable and request reimbursement
for the damage.
If you add up the
exposures not covered by your Association’s policy, they can be
significant, and potentially devastating. So how do you fill the
gaps in coverage? A Condominium Owner Policy can provide the
missing coverage. These policies provide coverage from losses
from fire, water damage, theft, liability, and many other perils.
Although
Condominium Owner Policies provide a wide range of coverages, they
are relatively inexpensive. Depending on the coverage selected, a
Condominium Owner Policy can be purchased for less than $25 per
month. Given the potential consequences, a Condo Owner Policy is
one of the smartest insurance decisions you can make.
Jon Gardner,
CPCU is an Insurance Agent with Farmers
Insurance who offers complimentary insurance evaluations. His
office is located at 27883 Smyth Dr. in Valencia. He can be
reached at (661) 775-9244 |
