A condominium is a great alternative for home buyers that prefer to avoid the cost and hassle of exterior maintenance. In Las Vegas, the market for high-rise condominiums is on the rebound and growing faster than the demand for single-family homes. Protecting that condo is the job of an HO-6 policy, also known as a condominium unit-owners policy. Here are some condo insurance buying tips to make sure you have the right policy protecting your investment.
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Under the ISO HO0006 10/00 policy form, the dwelling is defined as follows:
The alterations, appliances, fixtures and improvements which are part of the building contained within the “residence premises”;
Items of real property which pertain exclusively to the “residence premises”;
Property which is your insurance responsibility under a corporation or association of
property owners agreement; or
Structures owned solely by you, other than the “residence premises”, at the location of
the “residence premises”.
Your condominium association should provide insurance for the common building but, depending on your CCR’s, that coverage may end at the interior walls of your unit. That means floor coverings, cabinetry, light and plumbing fixtures, and built-in appliances are all your responsibility. A good HO-6 policy should include dwelling or structure coverage at a limit adequate to rebuild the interior of your condominium.
Related: Claims Covered by Home Insurance
Loss Assessment Coverage
Condominium associations have the right to assess unit owners for claims or losses that exceed the limits of the master insurance policy. Loss assessment can help pay for all or part of your share of that assessment. This coverage applies when the assessment is the result of direct physical to the property or a liability claim.
While large losses and lawsuits against associations are relatively infrequent, they do occur. A serious injury in a common area – such as a swimming pool or exercise room – could incur a liability claim that exceeds the association master policy limit. Or, a catastrophic loss to the building could exceed the limit of property insurance available to the association. These type of large claim almost always result in a loss assessment to the unit owners.
Many standard HO6 policies include loss assessment at $1,000. We recommend you consider $10,000 of coverage, or more, to adequately protect yourself.
Identity Theft Coverage
Many insurance carriers that offer condominium unit-owners coverage will provide identity theft coverage for a very small additional premium. Being the victim of identity theft is stressful, costly, and time-consuming. Buying this coverage on your HO6 policy may save you valuable time in dealing with the steps needed to restore your good name and credit.
Personal Property Replacement Cost
Many HO6 policies, by default, value your personal property on an actual cash value basis. A better option is replacement cost valuation which reimburses you for the cost to replace old with new. Replacement cost is available by endorsement on most condo insurance policies.
There are many discounts available on condominium insurance policies. Make sure you discuss all the available discounts with your agent to ensure they are being applied to your policy. HO6 policy discounts include:
- Gated community discount
- Claim free discount
- Multi-policy discount (i.e. auto insurance and condo insurance)
- Protective device credit (fire and burglar alarms)
- Fire protection discount (sprinkler system)
- New owner discount
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Find the Right Condo Insurance
We hope these condo insurance buying tips help you secure the right policy for your needs. Contact the professional agents at Safeguard Insurance for more advice and a no-obligation quote on your condominium unit-owners insurance.