Condominium insurance can be confusing

The answer could be a condo. But if you’ve never owned a condo before, you may be surprised to discover that there are a lot of differences between your

old home life and life as a modern cliff-dweller. Insurance peculiarities are just one of those differences.

Here’s one of the first distinctions to be aware of: Don’t make the mistake of taking tenant’s insurance when what you need is condominium owner’s insurance. They are not the same. (If you were renting a condo, however, a tenant’s package would be what you want. The owner will have the condominium unit owner’s insurance.)

If your condo corporation is not yet registered, you’ll need tenant’s insurance until it is registered, at which time you can convert your coverage to a condo policy. If you are the owner of the condo, your needs for coverage on your unit go beyond what is provided by a tenant’s policy.

Let’s look a little deeper. Both your building and your unit are covered by a “master policy” provided by the condominium corporation. Premiums for this coverage are paid out of your monthly maintenance fees. That coverage protects the “common elements” of the condominium – the elevators, gage, pool, etc. But it also usually covers the units themselves, taking into consideration the value of standard fixtures in your suite, such as floor coverings, kitchen cabinets and counter tops, and bathroom fixtures. Note the use of the word “standard”. If you have made any upgrades, these must be protected under your own condo package. What

you need here is called “improvements and betterments” protection. It will compensate you for loss of, or damage to, all the upgrades and extras you may have put into your suite. Of course, your condominium unit owner’s insurance also covers you for personal liability claims, and your personal possessions. Note that if you must make a claim that involves both your policy and the master policy, you’ll pay the deductibles on both policies.

You would be well advised to choose a company that specializes in condominium insurance. This will help to prevent any gaps in coverages between the condominium master policy and your owner’s policy. Unlike your homeowner’s package, where you only had the one policy to be concerned about, in a condo you must consider both policies. It is vitally important that you know which policy covers what, and when the coverage applies. With that knowledge, you can hit the fairways feeling a lot more comfortable.