Tips For Insuring Your Florida Condominium

By Author: Jay Bilas
Total Articles: 5
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Given the vast array of condominium styles and locations from which to choose in the Sunshine State today, Florida condominium living appeals to many, attracting buyers from across the nation….to across the world. Finding your dream condominium is easy in today’s market. Insuring the condominium appropriately is easy as well—once you learn a few basics of Florida condominium insurance.

When should my Condominium Policy take effect?

You should arrange that your condominium insurance policy take effect as of the closing date. In other words, condominium policies should be in force as of the date you purchase the condominium. Note that the policy will be in effect for a period of one (1) year, as Florida condominium policies run annually. Furthermore, as some companies may require the same, it is a good idea to have on hand a spare copy of the condominium association’s “master insurance policy,” which is the separate insurance policy maintained by the condominium association insuring the condominium building exterior and common areas (i.e., hallways, pool area(s) and the like).

Do I need ...
... to be familiar with the Condominium’s Master Insurance Policy?

Yes! The condominium association’s master insurance policy provides information on areas that are covered, as well as those areas not covered by the master policy, as well as insurable limits of the same. Areas which are not covered by the master insurance policy will need to be insured through your individual condominium insurance policy, known as an “HO-6” Florida condominium insurance policy. So always refer to your master condominium policy before seeking insurance for your condominium.

How do I determine coverage amounts for my condominium?
Once you have a full understanding from the master insurance policy of what is not covered there under, make a list of those items which you need to insure under your individual condominium insurance policy. For example, many master policies stipulate that unit owners are responsible for insuring the interior of the unit from the interior walls, inward. In this case, the initial categories for consideration are what are referred to as:

1.“Coverage A” – The interior walls, floors, ceilings, countertops, cabinets and any “built-in’s” of the unit; and

2.“Coverage C” – All of your contents located within the unit, including appliances and the like that are not built into the unit.
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To help in distinguishing between these two coverage’s, we recommend that you initially “tip the condominium upside down” in your mind. Anything that falls to the floor should be included under Coverage C, and anything that doesn’t fall to the floor should be included under Coverage A. It is a good idea to make a list of all such items that you are responsible for, including the approximate cost of such items, in order to determine the proper amount of insurance coverage.

Are there other coverages I need to consider?

1.Deductible Limits. As with all insurance policies, numerous deductible options are usually available. Speak with your Florida insurance agent about deductible options the insuring company currently offers.

2.Liability Limits. In light of today’s litigious society, we at Freedom Insurance always recommend selecting the highest liability coverage limit offered by the company. Note that this very important coverage is also very inexpensive to increase to the maximum offered limit, and a good Florida insurance agent should always recommend the same.

3.Loss Assessment Coverage. Another coverage of utmost importance, we always recommend purchasing the maximum loss assessment coverage available by the insuring company. As your Florida insurance agent will explain in detail, unit owners are subject to assessments, and increasing the coverage to the maximum available limit is well worth the cost of the same.

4.Actual Cash Value or Replacement Cost? This is a most important consideration, and we cannot emphasize enough the need for your thorough understanding prior to determining the same. Therefore, always discuss these options in detail with your Florida insurance agent before purchasing your insurance policy.
Insuring your condominium for “actual cash value” is a less expensive option than “replacement cost”, but depreciation factors apply, and you may not receive enough funds to actually replace said item(s). Replacement cost, on the other hand, offers the total cost of replacing said item in today’s market.

5.Additional Coverages. There are numerous additional coverages offered by most companies (i.e., jewelry, theft, water back-up, windstorm, flood), and a good Florida insurance agent will assist you in tailoring a policy to your specific needs.

6.Is it mandatory to purchase condominium insurance? As with certain lending institutions, your condominium association may also require unit owners to maintain insurance, and they may even stipulate minimum coverage limit(s) on certain coverages therein.

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