Buying condominium insurance means understanding what your own insurance needs are and what your HOA insurance covers. It also means digging a little deeper to find the answer to how much home coverage I need for my policy.

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Condominium coverage limits are determined by several factors, including coverage from your condominium association and the equipment and upgrade of your entire condominium. In addition, there are several other factors that are beyond your control. However, it is important to get adequate housing coverage when starting your condo ownership journey. Start here and learn how to find the right amount of coverage.

What is living space coverage?

A condominium is a private residence in a complex building or multi-unit building. A condominium means you own the residence, and therefore it is a piece of real estate. For condominium owners, living space cover provides protection for your walls and interior. This includes cabinets, walls, countertops, and other items attached to your home.

Housing coverage pays off for repairs or conversions when the walls and everything in your walls is damaged by hazardous events. Typically these events include:

  • Fire
  • smoke
  • hail
  • wind
  • lightning
  • Explosions
  • HVAC problems
  • theft
  • vandalism

As with homeowner and tenant insurance, your home coverage does not include events due to floods, earthquakes, or hurricanes. A separate policy is required for these selected Hazardous Events.

How much living space do I need for my apartment?

The general rule of thumb is to acquire sufficient housing coverage to rebuild your home if it is destroyed due to a covered hazard event.

The amount of home cover should also be enough to cover items that you need in your home, such as: B. countertops, cabinets, appliances and the like. Your apartment coverage only applies to existing square meters and not to any additions or upgrades that you may want to make to your apartment.

Housing coverage is in place to avoid having to pay all of the rebuilding costs out of pocket in the event that a disaster strikes your home. This includes the built-ins in your home too, so it’s important to evaluate exactly how much living space coverage you will need.

If you’re unsure how to determine the home coverage you need, speak to your HOA and find out which other condo owners in your complex typically choose. You can also speak to a local architect or contractor for a rough estimate of the rebuilding costs.

If, as the owner of a condominium, you also own other buildings, e.g. For example, a detached garage or fence, you need to expand your guidelines for these. This is usually calculated using 10% of the value of your home as a rough estimate.

The amount of housing coverage you need also depends on your HOA’s master policy.

Does my master policy have apartment coverage?

Every housing association has a master’s guideline. This provides insurance for the common areas and structures outside of your walls. However, a master policy can have greater coverage, so it’s very important to check it out carefully before purchasing your own condominium policy.

There are two categories that a master policy falls under:

  • Bare walls-in-master policy: Covers the outside of the walls and the owners of the apartment are responsible for everything inside. Bare walls are the lower cost option for an HOA. If your HOA selects this, you will need additional living space cover for the interior of your home and your personal belongings.
  • All-in-master policy: This includes walls, floors, the ceiling. It also covers the interior of your home, including cabinets, floors, and appliances. You need a personal affiliation to cover the rest.

If you’re unsure if your master policy has housing coverage, contact your HOA for details, and then work with your agent to make sure your condominium policy covers any loopholes.

How To Calculate How Much Condo Coverage You Need

Let’s say your apartment has a bare wall covering. To calculate how much residential coverage you need, you need to consider several factors. In addition to estimating the cost of rebuilding, you need to remember that your insurance will pay off based on the replacement value, rather than the cost of the items when your home was built.

The insurance company takes several other considerations into account when calculating home coverage, and you should use the same information for your own home coverage calculator. This contains:

  • Square footage
  • County fees
  • Current construction costs
  • Interior work
  • labour costs
  • Building permit

If you have a mortgage on your home, your lender will likely require that you have home coverage of at least 20% of the estimated value of your home. For example, if your home is worth $ 600,000, the minimum required by your lender is $ 120,000.

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How do I update my apartment coverage?

When upgrading your home, pay attention to how much living space you need. Your home should appreciate in value after upgrades like a new kitchen or updated bathroom. If you update your policy, you will have enough coverage to be re-created after an event with a covered hazard.

Labor and building materials costs play a big part in getting the coverage you need. As these costs increase over time, you will need to update your coverage amount to reflect these changes as well.

The cost of living is another factor influencing the need for increased (or decreased) housing coverage. A change in property value over time may warrant updating your coverage.

Check your policies regularly to update your home coverage. You should contact your agent during your review or anytime your home is upgraded.

We appreciate your feedback on this article. Contact us at Inquiries@thesimpledollar.com with comments or questions.

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