Your home is your safe haven…a place where you can relax, entertain, and store tangible memories and keepsakes. Whether it is a house, townhome, or condo, accidents can happen at any given moment and affect your belongings, investment, family, and shelter.
Having condo insurance is a way to help mitigate the financial challenges that accompany a variety of unpredictable events that can negatively impact your condo unit. However, when is the last time you read through your insurance policy or evaluated other insurance policies?
Whether you already have a condo policy or are determining which is the right one for you, the technical jargon can be complex and may even steer you in the wrong direction.
10 Key Condo Insurance Terms to Know
Make sure you have the best policy for your lifestyle, budget and needs by understanding the following key condo insurance terms.
#1: Ho6 Insurance
You may have heard the term “Ho6 insurance” in your search because it is a type of condo insurance specifically designed to cover various aspects of your unit, including:
- Structural improvements
- Personal belongings
- Personal liability
- Assessed losses by your condo association
#2: Dwelling Coverage
Dwelling coverage is another type of condo insurance that complements your condo association’s master policy. This type of protection covers the permanently affixed items in your unit, up to your policy’s dwelling coverage limit.
#3: Personal Property Coverage
This type of coverage can be a little tricky because not everything you consider personal property may be included in this coverage, such as golf carts. Commonly covered personal belongings generally include:
- Household tools
This is an added protection to the type of insurance policy you choose. It supplements the allotted coverage in your basic policy to help cover items, like jewelry, that exceed the amount of coverage in your policy.
#5: Inflation Protection
The cost of goods is subject to change each year based on several economic factors, including inflation. Inflation protection in your policy raises your coverage a small amount every renewal period to keep up with the pace of inflation.
Consistent with most types of insurance (health, auto, etc.), the premium is the monthly, quarterly, or semi-annual payments you make to pay for your insurance policy.
In the event you file an insurance claim with your condo insurer, you would typically pay a deductible if the cost of damages exceeds the deductible amount. Your insurance company would pay out the additional costs.
#8: Replacement Cost (RCV/ACV)
Replacement cost (RCV) is a little different than the actual cost value (ACV). RCV refers to how much it costs to replace the damaged item, whereas ACV refers to the actual cash value of the item, as it may have depreciated over time.
#9: Condo Association
Most condo associations have a master policy that insures common or shared areas of the property. Sometimes, the master policy may even cover select parts of individual units, but most only protect the common spaces. It is important to understand what the master policy covers in order to best determine the type of coverage for your needs.
#10: Additional Insured
There is a declarations page on every policy itemizing the scope of your insurance coverage, including any additional insured parties who are not the condo owner but have a legal interest in the property, such as a mortgage company. The additional insured parties may be notified of any policy renewals, potential cancellations, claims, payouts, etc.
Searching for condo insurance can easily become overwhelming and complex. At GWK Insurance, we help you find the policies that best meet your lifestyle and financial needs. Contact us today to get the right condo insurance coverage for you.