Home insurance is just part of the standard operating procedure when it comes to purchasing a house in modern society. Without proper coverage, you’re just tempting fate every single day and eventually something will happen.
However, if your new home happens to be a condo the rules may be a little different. The condo corporation also has insurance, but that doesn’t mean it’s ok for you to go without.
Don’t Make Assumptions
In fact, one of the worst things you can do is to assume that your condo corporation’s insurance will provide you with all the coverage you need. There’s nothing worse than something happening and finding out later that you needed additional coverage for whatever it is. That’s why you should know about the different types.
Standard Unit Insurance
Standard unit insurance refers to a portion of your condo’s maintenance fees that are allocated to specific areas of the building and unit. These usually include damage to the lobby, elevators and other common areas of the building, as well as some of the “standard” features in your individual unit. These include things like your kitchen countertops or original flooring.
If you choose to have install upgrades in your unit and they get damaged, your standard unit insurance will only cover you up to the value of the original materials. Sometimes the difference is negligible, but other times you’ll be in for a loss if you don’t get additional coverage.
New Home Warranty Insurance
New home warranty insurance refers to insurance on a pre-construction condo or brand new condo you’ve purchased. This kind of coverage only applies to new construction, because defects in the workmanship or the materials used are covered for up to an entire year after the building is completed.
When you buy your condo, this insurance should be worked into the price, but you may find it elsewhere like the statement of adjustments. Whether new home warranty insurance is mandatory or not depends on where your new condo is located. Different cities have different rules and different programs available.
Do Your Research
The key is to do your research before you finalize the mortgage and purchase your condo. Look into what things are covered and what you need to cover, and if new home warranty insurance applies to your situation.
With new construction or pre-construction, the likelihood of “mishaps” is increased, so make sure you’re covered for everything and no surprises will be waiting down the road.