Why Do You Need Commercial Condo Unit Owners Insurance?
Commonly referred to as an HO6 policy, commercial condo unit owners insurance is designed to protect the space while also offering liability coverage and living expenses coverage in the event that the unit becomes uninhabitable.
These policies are also termed "walls-in" coverage due to the fact that they protect a person's individual space, while the master policy operated by the condo's association covers the common areas of the building.
It's important to note that standard insurance will not apply in every scenario, like flooding. Consequently, you'll need to consider additional policies depending on the location and how much time you'd like to spend living there.
What Does a Standard Commercial Condo Insurance Cover?
Traditionally, condo insurance policies provide coverage for several categories, including building property, personal property, personal liability, loss of use, and loss assessment.
The building property is focused on the individual unit and includes fixtures and walls. Second, personal property includes electronics, furniture, and other goods that are movable. Third, personal liability includes any legal expenditures from lawsuits or claims made against you. Fourth, loss of use includes the expenses related to transportation and relocation in the event that the unit becomes uninhabitable. Lastly, loss assessment includes your losses that are taken by the association.
The key difference between the HO6 policy and the typical HO3 homeowner's policy is that the former is exclusive to the interior unit structure from the walls-in.
Normally, the property coverage and specialty specialty dwelling coverage for condos cover a set list of perils, including fire, vandalism, theft, and hail. The hazards which aren't disclosed by name are not covered. This means you are single handedly responsible for paying for those property damages.
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Other Types of Condo Unit Owners Insurance Coverage
Outside of condo unit owner's insurance, every common area belonging to a single condo building has protection under a master policy purchased by the association. This not only includes the exterior and roof but also internal regions like hallways and elevators.
The cost of this master policy is divided amongst all the unit owners in the form of recurring fees. There are three main classifications of condo master insurance policy:
- Bare walls are the most limited policy of master insurance that covers the structure and most of the furnishings and fixtures in common areas. Furthermore, it covers properties that are collectively owned by the association.
- Single entity includes everything in the bare walls package but extends to built-in properties like fixtures.
- All-in coverage covers all property under the ownership of the condo association and part of the building's structure.
Depending on the master insurance policy implemented by your condo association, you will pay more or fewer fees. You should always reach out directly to them for a copy of the declaration, which details what is covered under the master policy.
Finally, if you have vacated the condominium unit for an extended time beyond 30 days, your policy may not provide coverage for damages occurring during this period.
Insurers look at vacant, unoccupied properties as a greater risk since there is a higher chance of break-ins, and the fact that it takes a long time to address issues.
Discounts and Other Ways to Save on Commercial Condo Unit Owners Insurance
Having a commercial condo unit owner's insurance, like any kind of homeowner's insurance, is inevitably expensive. Of course, it exists to protect your living space from financial ruin and potential disaster. Prices for policies vary between companies. Here are some of the best ways you can save money on condo unit owner's insurance across the board.
Raise the deductible
By definition, deductibles represent the amount of money you're required to pay toward insured losses. The higher they are, the more you'll save on a premium.
If you are capable of paying above the minimum $1,000 deductible, you'll likely be able to reduce costs related to your homeowner's policy.
Make your space more resistant to disaster
If you live in an area prone to natural disasters, you will have far more options to select from if you take certain precautions.
For instance, the installation of shatterproof glass, storm shutters, and reinforcement for the roof.
Older homes can have retrofitting done to improve their ability to withstand potential earthquakes.
Consider renovating your electrical, heating, and plumbing systems to reduce the potential risk of damage from water and fire.
Try group coverage
There is a possibility that your employer administers a program for group insurance. Check if there is a homeowners policy available. Furthermore, business, professional, and alumni groups may provide a package at a reduced price. No matter the offer, check the math to ensure it's the best deal you can find anywhere.
Stay loyal to your insurer
If you've been with the same insurance company for a certain number of years, try asking them for any discounts as part of being a loyal policyholder. Still, to ensure you are receiving the best deal, always shop around.
Use G&G Independent Insurance to compare rates. For the best prices, get a quote or call us today.
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We're delighted to have a one-on-one conversation with you to address all your questions about business property insurance, including coverage tailored for commercial condo unit owners. Reach out to us today!
