Condo Insurance is sometimes referred to as walls-in coverage or HO6. It is to provide coverage to the individual unit owner, whereas the condo association policy or master policy generally covers the areas.
The unit owner policy covers the interior structure of the unit, provides personal property coverage, liability and loss of use coverage if you are unable to reside in your condo after a covered loss. Loss of use coverage may also be referred to as additional living expense.
Like homeowner’s insurance; your personal property coverage can be on an actual cash value basis or replacement cost. Replacement cost is what you would pay for an item to day whereas actual cash value is what you would pay for an item today less depreciation due to age or wear and tear.
Special Personal Property Coverage may also be available for additional premium. This changes the personal property coverage, unit owner’s coverage C to “all risk.” All risks policies cover all perils, except those specifically excluded, vs a named peril policy which names the risks covered. For example; a named peril policy usually starts with naming fir, lighting, and explosion as covered perils.
A condo unit owner’s policy will typically provide for Loss Assessment Coverage as well. If the Association experiences a claim to common areas and the claim exceeds the master policy limits, the association will assess the individual unit owner’s to cover the loss. The nature of the association’s loss to the common area would have to be a covered peril under unit owner’s policy. For example; a fire occurred in the association’s gym.
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