Tag: home owners insurance

Five Things You Should Know About Condo Association Insurance

Posted on by butlervetinsurance

A condominium unit owner usually has their own insurance policy that covers for loss of personal belongings, parts of the building that the condominium agreement makes individual owners responsible for insuring, the additional cost of living elsewhere after a fire damages a unit, and legal liability for injuries or damages suffered by others. In turn, the condominium association has its own policy, which might cause some unit owners to wonder why they have to buy separate insurance. Doesn’t the association’s insurance cover the same things? Depending on the property at issue, the answer is maybe yes and maybe no. Insurance companies designed the two types of policies to complement each other in some cases and to overlap in others. Here are five things unit owners should know about their associations’ insurance.

The association’s policy covers the building. Depending on the wording in the contract between the association and the unit owner, the word “building” may mean several different things. If the contract requires the association to insure them, “building” can include fixtures, improvements and alterations that are part of the building and that are within a unit. For example, if a unit owner installs new track lighting or an attached island in the kitchen, the association’s insurance would cover the cost of repairing or replacing them after a loss. Also if the contract requires, the association’s insurance will cover various appliances such as refrigerators, stoves and dishwashers.

The association’s policy covers personal property “owned indivisibly by all unit owners.” Furniture in the building’s lobby, hand carts and other moving devices, and exercise equipment in an exercise room available to all residents are examples of the types of property that the association’s policy insures.

The association’s policy does not cover the unit owner’s personal property. A unit owner must buy their own insurance to cover furniture, electronics, clothing and other belongings. Assume, for example, that the condominium contract requires the association to insure appliances. If fire damages a unit owner’s space, the association’s insurance will cover the refrigerator but not the sofa. The unit owner’s policy will cover the sofa. The association’s policy also does not cover an individual unit owner’s legal liability for injuries or damages suffered by others. The unit owner needs their own insurance to provide for legal defense and to pay any judgments.

It is possible that both policies may apply to the same item of property. In the above example, both the association’s and unit owner’s policies may cover the refrigerator. In that situation, the association’s policy will apply first; if it does not completely pay for the repair or replacement, the unit owner’s policy will cover the balance. For example, if the cost of replacing the refrigerator is $5,000, and for some reason the association’s policy covers only $4,000, the unit owner’s policy will pay the other $1,000 (the example doesn’t include deductibles that may apply).

The association’s insurance company will not try to get its money back from a unit owner. Suppose a unit owner left a candle burning overnight and the unwatched candle caused a fire that damaged part of the building. Many types of insurance policies would allow the insurance company to pay its customer for the damage, then try to recover its payment from the person who caused the damage. However, a condominium association policy specifically states that the company waives its right to recover from a unit owner. It still has the right to seek recovery from a person who is not a unit owner and is responsible for the damage.

Although comprehensive, the association’s policy is no substitute for a unit owner’s own insurance. Work with our professional insurance agents to ensure that you have the proper coverage.

If you have any question regarding this article or if you would like to discuss your insurance program, CALL 877-994-6787, that’s 877-99-INSURE and speak with any one of our knowledgeable Protection Coaches Today!

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Renters Insurance – A Small Price to Pay for Financial Security

Posted on by butlervetinsurance

If you’re currently renting a house or apartment, you should strongly consider an investment in Renters insurance. No one likes to think about the possibility of a fire or a burglary, but these are real possibilities. Burglars can break in while you’re away and steal your computer, entertainment system, jewelry, and other valuable items. Without Renters insurance, you will have thousands of dollars in out-of-pocket costs to replace the stolen items. By contrast, if you have Renters insurance, you will promptly receive a check that covers either the replacement costs for the stolen items or the current value of the items — depending on which type of insurance policy you’ve purchased.

Maybe you believe there is little risk of a burglary in your geographic area, but what about the risk of fire? Fires strike randomly and can begin in electrical wiring over which you have no control. It’s unpleasant to contemplate, but you could come home to find that everything you own has been destroyed. With Renters insurance, you would have a check in hand quite soon to begin refurnishing your life. Yet another scenario for which Renters insurance can be of enormous benefit is personal liability. If a visitor is injured in your home, for example, by falling down the steps, you could be liable for her medical bills. Renters insurance would cover this liability. Some renters are under the impression that their possessions are covered by their landlord’s insurance. This is rarely true. Typically, the landlord’s insurance covers loss or damage to his property, not yours. Your landlord’s insurance also covers his liability in case anyone is injured on the property, though not always injuries inside your apartment.

Most renters can get comprehensive coverage for a few hundred dollars per year, depending on where they live. Considering the risks covered by Renters policies, this is a low cost for the potential benefits. Look around your house or apartment and take an inventory of items you would need to replace in the event of a catastrophe. Take note of high value or difficult to replace items such as antiques, furs, jewelry, or expensive art. Before you get a policy or immediately thereafter, you should record information on all your high value items, including details about the make, model, serial number, age, and costs (both purchase and current replacement). It might also help to have photos of these items for identification purposes.

A basic policy usually pays only for the actual cash value of your items at the time they were lost. In other words, they would be valued not at what you paid for them originally or what it would cost to replace them, but at their actual value as used items. So a 3-year-old computer would be covered for its initial cost minus depreciation. Since computers depreciate quickly, yours might be worth little by the time it’s 3 years old, so your insurance proceeds will be limited.

If you have expensive items like electronics that are subject to depreciation, you should consider replacement cost coverage. With this type of policy, you would be reimbursed for the current cost of buying a new equivalent item. Thus, in our example of the $2,000 computer at 3 years old, you would receive a check that would enable you to buy a new computer. Of course, replacement cost coverage is more expensive. It’s up to you to decide which type of coverage — actual value or replacement cost — best fits your needs and budget. Like most other insurance policies, your Renters policy will have deductibles. A deductible is an amount of loss you will have to absorb yourself before receiving any money from the insurance company. For example, let’s say you have a policy with a $500 deductible. You have cameras you bought for $2,000 several years ago. If you have replacement cost coverage and the cameras are lost in a fire, you would receive a check for $1,500 from the insurance company. Of course, you can lower your insurance premium by accepting a higher deductible, but this means if there is a loss, you must absorb more of it from your own pocket.

Renters insurance usually does not cover damage from floods or earthquakes, but you might be able to get endorsements for these and other “acts of God.” An endorsement extends the perils covered by your policy. Obviously, you must pay an extra premium for the extra coverage. Be sure to discuss any special high value items, such as antiques, furs, and jewelry with our protection coaches®, since you might need extra coverage for these. As mentioned, a basic Renters policy includes liability coverage should someone be injured in your rented home or apartment. As with Auto insurance, there is a per-incident limit on this coverage, and you should make sure this is high enough to protect your assets.

Give us a call today for your free insurance quote at 951-600-5751 or email us at [email protected].