A condo owner should invest in condo insurance. This is because a condo owner is not protected by all aspects of the building owners insurance. The tenant needs coverage for their personal belongings, and liability coverage for inside of their condo.
Why should I insure my space?
It’s common for lenders to require their borrowers to have condo insurance for their units. If damage occurs to the unit’s interior or a third party is injured inside, than that can interfere with the lender’s interest in the property.
What does it cover?
Your condo association should have coverage for the exterior wall and other public areas. Your personal policy is a “bare walls-in” policy. That means it ordinarily insures your living space and personal property inside. Covered incidents include fire, lightning, tornadoes or windstorms. Also smoke damage, burglary and theft, and water leaks are covered.
Coverage is important because if the building burns down, your association’s master policy is going to cover the outside walls and common areas. You are not covered in that policy. You’re responsible for all of your own belongings and finding a new place to stay.
Master policy deductible
Most condo owners don’t know, but they’re responsible for part of the deductible in their condo’s master policy. To keep premiums down, condo associations spread the cost across the board to the members. Your personal policy may cover some or all of this cost for you, should a claim be made.
You might not be required to get condo insurance, but it’s a good investment. If anything happens to your belongings, then you know you’ll have insurance coverage.