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Condo Insurance: Staying Covered while Saving Money

by Amy Lillard

(5/30/2012) If you're buying a condo, insurance must be a priority to protect your unit, your personal property, and yourself in any cases of liability. To save on this necessary expense, there a few key methods to research and discuss with your insurance company.

DEDUCTIBLE
Just as with auto, regular home and other types of insurance, raising your deductible lowers the amount you are required to pay each month. Make your deductible doable, but consider raising it to at least $1,000, which can reduce premiums as much as 25%. Never raise your deductible beyond what you could conceivably pay if needed - if you need to file a claim at some point, you will need to meet this deductible before receiving any reimbursement.

DISCOUNTS
Depending on your insurance company, you could qualify for any number of discounts that could reduce your monthly premium. Some typical discounts include:

• New purchase: If you are purchasing a condo and a new insurance policy in the same year, you could save.
• Multi-policy discount: If you use your insurance company for multiple policies, like condo, car, and recreational vehicles, you could save.
• Gated community: If your condo is located in a gated community, some insurance companies consider risk for damage and theft lower, so you could save.
• Protective devices: If your condo is equipped with smoke detectors, fire alarms, fire extinguishers, burglar alarms, security systems, or other protective devices, insurance companies see the risk for damage or theft is lower. You could save.
• Claims-free history: If you have not filed a claim for a specified amount of time, you could save.

PLANNING AHEAD
Thinking beyond your monthly payments, a surefire way to save is to avoid needing your insurance. If you avoid damage and theft as much as possible, you can spare yourself the stress and added cost of filing claims and paying out expenses and deductibles. That means engaging in some proactive behaviors to keep your condo running smoothly and your property protected. This includes:

• Check insulation: Make sure your unit is as airtight as possible, which can save you on monthly heat and cooling costs and also prevent costly damage.
• Maintain pipes: Check for cracks and leaks, and have any minor pipe damage checked out to prevent costlier repairs (or dangerous situations like burst pipes) in the future. Also, know how to shut your water off - this is the best way to keep any water damage contained if it does occur.
• Check heating and cooling systems: Have furnaces, boilers, chimneys, air ducts, and cooling systems checked routinely to prevent electrical shortages, fires, and smoke damage.
• Check alarms: Make sure your fire, carbon monoxide, and any security alarms are in top working order at all times.

KEEPING COVERED
When you're trying to save money, don't lose sight of ensuring the best coverage for you and your condo. If something happens, you'll lose money you may not have to expenses if your insurance doesn't cover something. That means knowing what's covered and what's not in a typical policy. It also means making sure you have adequate personal property coverage, riders for things like floods and earthquakes (if you live in an area prone to these disasters), and extra coverage for extra valuable items. Finally, it also means being aware of how insurance changes when you remodel, or when any damage caused to the building is not covered by the condo association's policy.

For additional reading:

Top 4 Questions for Condo Insurance: http://personalinsure.about.com/cs/condominium/a/aa050404a.htm

 

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