We often look for places to save. Most of the time, we skimp on safety and security and leave everything to “God’s will”. This is an impractical use of faith. We should do everything within our means to keep ourselves safe and secure at all times.
Having a personal policy should protect you from theft, damage to property and other personal liability situations.
It is important to get a condominium insurance considering the risk you are exposed to involving incidentals when living within a wall and floor away from other tenants. Given this reality, “Do I need insurance?” is actually out of the question.
The First Question
“What kind of coverage do you need?” This will all depend on the specifications of the structure’s master policy. But essentially, it should cover everything within the four walls of your unit. Make sure you understand the lines where the coverage ends, so that your personal policy can cover the rest. There are instances like leaking pipes, etc. The master policy may cover that but may not be extended to other damages.
It would also be ideal to get the same insurance company that insures your condominium. This will eliminate finger pointing and disagreements should a gray area of dispute arise.
The other questions that need to be considered are:
- How much would it cost to replace or repair my condo?
- How much are all of my personal items worth?
- Do I have especially valuable items in my condo, such as jewelry, antiques, fine art or collectibles?
The second and third question can be answered by a proper inventory.
Here’s the list.
List down everything of value, not just jewelry. At this point you may encounter a choice between a coverage of actual cash value and replacement value. Actual cash value is cheaper but the wisdom behind it is that the insurance will only pay for an item based on its current value. Meaning, your wide screen LCD TV is not the same worth from the day you bought it. Replacement value will replace it accordingly but it would be a significantly more expensive policy.
You may also want to have your expensive jewelry purchase a separate rider. Your policy limit may hamper you from recovering the cost of the jewelry.
Read your policy details especially on exceptions like floods and earthquakes. These are not covered in the basic policy. If you live in an area that is prone to flooding or within a fault line, you will have to purchase a special rider policy that will cover these disasters. You may also want to look at possible hurricane damages.
It doesn’t come cheap.
Some condos, in an effort to sell, will guarantee you that their master coverage should be good enough coverage for an average tenant living in a new building of average incident. You’ve already spent much in acquiring the unit, you should protect your investment from as many angles as possible.