Condominium Coverage, also known as HO-6, is designed for the owners of condos and co-op apartments.
The condominium building is a commonly owned property and is normally insured through a condominium association policy, also known as a master policy. The condominium association policy covers items which are structural parts of the dwelling and the shared areas of the complex, such as the roof, the basement, the elevator, the parking area, the swimming pool, exterior walls and walkways. Living in a condominium, you become a shareholder in the corporation and it allows you to access these shared areas. At the same time your association policy appears to be rather limited when it comes to your personal property. For example, it does not cover losses resulting from burglary, damage from water plumbing and many mishaps that may occur on the part of the building occupied by the condominium unit owner. It does not include Personal Liability either.
In addition, Condominium Coverage protects any improvements, additions, alterations, installations, fixtures made or acquired by you or any previous owner of the unit. It is worthwhile protecting your property through this endorsement because standard policies impose limits on the total amount which you will be reimbursed in the event your condo suffers a loss from a covered peril. The set limits may not be high enough to cover the replacement cost of the introduced improvements such as new appliances, upgraded floor coverings, a new kitchen cupboard, or an expensive built-in cabinet.
It should be noted that this type of Homeowners Insurance policies incorporates additional living expenses benefit, which means that the insurance company will reimburse you for your living expenses you incur while your condo unit is being repaired
To determine the amount of Condominium Coverage you need to purchase, it is advisable to carefully study the provisions, conditions and exclusions of the association policy. A rough estimation suggests that the amount of coverage to buy depends on the costs necessary to replace your condo unit and the value of your condo's contents. Any type of Condominium Insurance policy can be extended to cover a number of potentially dangerous situations. For example, additional coverage may protect some seasonal property or motor vehicles, or it ensures that you get reimbursement in case you are denied access to your home because of a peril coming from the neighboring premises. For people living in a condo unit and working at home there is a special endorsement insuring their home-based business and offering additional liability.
Another option you can make use of under Condominium Coverage is to provide protection for such items as jewelry, artwork, collectibles, computers and other expensive things. Such items are exclusions in most of the policies, but they still can be fully insured under what is called a floater. Without a floater only a set percentage of the cost can be reimbursed. So, remember that a floater is one more way to extend your coverage.