subject: Three Things You Need To Know About Condo Insurance [print this page] Three Things You Need To Know About Condo Insurance
One of oft-heard praises sung about condo ownership is that you never have to cut your grass, repave the driveway, or shovel the walk. Another advantage that has even more financial appeal is that condo insurance NJ is cheaper. Logically, because you only own part of the building you live in, you only pay the part of the insurance that covers your unit. In most complexes, communal use areas like hallways and entrances are insured utilising community fees. This system can offer considerable savings for condo owners, but there are a few things to be aware of before it is too late.
The first thing to look at is the master policy that covers the entire condo complex. Various plans will define differently the responsibilities of the community versus the unit owner. You will want to know exactly where the coverage of your unit stops so that you can obtain additional insurance if necessary. There are two basic plans that apply to most condo situations. A Bare-Walls-In plan means that the structure of the building is insured while fixtures, counter tops, decorations, and so on are not. An All-In plan includes fixtures as well as the structure.
Another important question is the amount of the deductible for the master policy. In the case of damage or loss, condo insurance NJ will begin paying for repairs only after the deductible limit has been reached through out-of-pocket spending. This amount will be split among the unit owners, which can still result in a heavy bill before the insurance company starts picking up the check. Recent trends have seen condo associations lower their insurance costs by opting for high deductibles. This may come as a shock for someone who thought they had adequate coverage.
Once you have determined how much insurance you buy with your community contribution and how much deductible you can expect to pay, you will need to decide between cash or replacement value. This refers to how the insurance company will asses your losses after a fire or other damage. Cash value is how much you could sell your things for today (if you still had them). Replacement value will reimburse you the cash required to replace the items that you lost at current prices. As with anything else, the higher value service will cost you more.
How much coverage anyone will need is a matter of personal choice. Many professionals talk about the sleep test. In other words, how much insurance coverage do you need to guarantee that you do not stay up at night worrying. Because owners can end up paying less for condo insurance NJ, they may have an extra opportunity to buy additional coverage. The first step is determining exactly what you own when you buy a part of a building, and how it is covered by the existing insurance policy.
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