A Condo or townhouse is a great option for many homeowners, but condo insurance can be tricky. Condos and townhouses are often more affordable than traditional homes and they require less maintenance because of shared walls and common areas. Condos and townhouses also come with a few unique insurance needs that many homeowners may not know about! Read this blog post to learn more about how to properly insure your condo or townhouse so you can protect it from any unforeseen disasters.
Read your association bylaws
It’s important to read the association bylaws before purchasing (and insure) a Condo or townhouse. This will give you insight into what is and isn’t allowed in the Condo or townhouse as well as any insurance requirements that you’ll need to comply with. Condos and townhouses often come with shared walls and common areas which means if something goes wrong there it will impact everyone, not just your family. Association bylaws also spell out things like how much square footage you’re allowed for each person, what color you can paint your Condo or townhouse, and more!
Once you’ve read your bylaws – you’ll typically find 3 ways your HOA may (or may not) insure your condo.
Walls In Coverage
Original Spec Coverage
‘Walls In’ Condo Insurance Coverage
If your Condo or townhouse is “walls in” coverage, this means the Condo Association covers anything that happens to the exterior of your Condo. So, if someone hits your window with a rock and it breaks, they might have to fix it! Condos and townhouses with walls in coverage are typically required to pay a Condo Association fee for inclusion.
No Coverage – YIKES
In Condos or townhouses that don’t have walls in coverage, you’ll need to purchase your own Condo insurance. This is commonly seen in older HOAs or places with no HOA. Unit owners will need to purchase insurance with replacement cost coverage on their entire unit.
Original Spec Condo Insurance Coverage
The third way Condos may be insured is with “original spec” coverage. This means that the Condo Association will cover anything that impacts the original condition of the Condo, like cracked windows from the original construction or anything related to when it was first built. This means that if your unit came with carpet – but you installed hardwood floors – the unit owner would be responsible for the cost difference in price between carpet and hardwood.
We can help
Condos and townhouses can be a great investment for homeowners, but they require proper Condo insurance in order to protect one’s investment. If you’re considering purchasing or managing Condos or townhouses, it’s imperative that you read your Condo association bylaws first so that you understand the unique requirements of these dwellings. From there, take time to research all three types of Condo insurance coverage available and compare them to find the best option for you. It may seem like an overwhelming process at first glance – but we’re here as always with answers! If this sounds difficult and confusing, don’t worry because our team is more than happy to help walk through each step with you on how to insure your condo properly.