The Ultimate Guide to Understanding Condo Insurance: What You Need to Know

Condo insurance is an essential part of any condo safety and security checklist for condo owners.

While it may seem like an unnecessary expense, insurance protects you against financial risks brought upon by potential property damage. No place is 100% safe from unforeseen hazards after all. Your condominium building can easily be affected by unexpected circumstances, like accidental fires, earthquakes, or even extreme weather conditions.

By purchasing an insurance policy for your humble home, you can ensure that your property investment is financially protected from all forms of harm. So whether you’re a newbie homeowner or a veteran condo-dweller, you’ll want access to tips to understand the benefits, types, and costs of such policies for your unique needs.

Looking for helpful tips to learn more about this safety and security topic? The experts from your DMCI Homes community have got you covered. Discover the ins and outs of these safeguarding policies and make informed decisions about your condo insurance when you check out this comprehensive guide.

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Types of condo insurance in the Philippines

Insurance for condo homes works a little differently when compared to the same service for regular homes. Condo owners don’t own the building or the land they live on - developers do. As a result, the exteriors and shared areas of a condominium can be insured by a master or homeowner’s association policy, but individual units often require their own unique coverage.

You usually get two kinds of master policies as a condo-dweller:

• All-in or inclusive - This homeowner’s association policy should be “all in,” covering the indemnity of all items built into your unit, like light fixtures, cabinets, and appliances. An all-in policy does not, however, cover personal belongings like the furniture you bring into the unit, your clothes, or your other possessions.
• Bare walls-in - This master policy only covers the basic framework of your unit, including bare walls, floors, and the ceiling. It may also cover plumbing and electrical systems. The bare walls-in policy does not insure any of the things attached to them, however, like fixtures or appliances. You’ll need to get extra indemnity for these items under your individual contract.

To find out what policies your development offers, you’ll have to inquire with your property manager.

When you eventually end up purchasing your insurance for your unit, you can go for any of the following options:

• Dwelling coverage - This coverage type generally safeguards a unit’s foundational framework, like walls, floors, and ceilings, especially during perils like fire, water damage, or explosions.
• Personal property coverage - As the name suggests, this type covers your personal property - that is, items that are not attached to your unit. This can include your own appliances, electronics, clothing, and furniture.
• Liability coverage - This next type provides you with financial protection against people who claim to have been accidentally injured on your property. With this type of contract, you’ll get liability coverage over expensive legal costs and payouts from such incidents.
• Additional living expenses coverage - If your unit becomes unlivable due to perils that are listed in your master or personal policies, this type will pay for additional expenses for living somewhere else while your home is under repair.

Whatever new contract you’ll get for your unit may have a combination of these types, and may even include all of them under one agreement. As long as you thoroughly consult with your insurance agent and your property management team, you can understand what types of additional safeguards you need for your home.

So what’s the cost of the perfect policy with comprehensive protections and indemnity? Continue to the next section to understand the factors influencing such condo premiums.

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Understanding condo insurance costs

Knowing what your policy can or cannot cover, the next thing you should know is that the more your insurance can safeguard your home, the higher its rate will be. Along with the coverage types listed in the previous section, other factors that can directly influence the cost of your contract include:

• Location - Where you live is a big factor that can directly influence your premiums. For example, if you live in a place with a long history of crime, vandalism, or theft, your premiums will become more expensive. The same goes for natural disasters like weather-related events. You may see a higher premium rate due to these commonly occurring hazards and threats. Generally, the higher the risk, the higher the premium is for your unit.
• Age of the building - The older your condominium building is, the higher the likelihood of costly premiums too. If, for example, your unit was built a long time ago with older or aging materials, you may also experience more damage to your plumbing, electrical systems, or roofing, leading to a greater need for check-ups and repairs.
• Your own personal claims history - If you have a long history of making a lot of personal claims within a short period, your insurance company may consider that as they calculate your rate. They may increase the cost of your premium to deter you from making more costly claims in the future.

Given these considerations, you need to strike a balance between the coverage you want and the cost of your premiums. You’ll want enough protections and safeguards for a worst-case scenario like a destructive fire, but you’ll also want to buy a contract that fits within your available budget.

So how might you choose the best indemnity contract possible for your home? Check out this next section for a comprehensive list of tips.

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Choosing the best condo insurance policy

To choose the right policy for your unique needs, you’ll want to do the following comprehensive tips:

• Assess the value of your condo. What is the total value of your unit? You can assess the value of your condo by creating a complete inventory of everything you own inside it. This will help you and your agent decide the value of your home and the subsequent amount of protection it will also require.
• Carefully review your master policies. This was hinted at in an earlier section, but the next thing you should do is carefully review the scope of your master or homeowner’s association policies. By understanding the scope of this existing contract, you can decide what else requires additional safeguarding in your home.
• Consider your coverage needs. Are you in a high-risk location with lots of exposure to crimes, or even natural disasters? You’ll want protection from those potential hazards. Do you keep a lot of high-tech appliances or equipment in your unit? You’ll want indemnity for those as well. Consider what needs extra protection inside your unit to help you choose the best possible policy for your property.
• Get quotes from at least three companies. Once you start browsing for policies, remember to get initial quotes from at least three different insurance companies. By comparing and contrasting similar offers, you can negotiate for a contract that’ll safeguard all your needs for a fairer price.
• Study all their exclusions and limitations. Yes, all of them. A huge part of adult life is being incredibly particular about the investments you make into your lifestyle, and your insurance is no exception. Study every single limitation in your contract and see what you can do to remedy those exclusions with additional safeguards.
• List down questions you want to ask. This is another part of adult life - asking a lot of clarifying questions. No matter how silly your inquiries may seem, don’t be afraid to list these questions down and ask all of them during your consultations with your agent. That’s what they’re there for, after all - making sure you have the best product possible for your needs.
• Ask for discounts. This top tip might seem like a bit of a stretch, but if the opportunity arises, don’t be afraid to ask for discounts from your agent. The company you choose may provide discounts for things like home and car insurance bundles, so if you think you can benefit from such offers, go ahead and take them.
• Consult your property management team. Last but certainly not least, remember to consult with your condominium’s property management office. You can ask them questions about things like your building’s master policy or their recommended companies, to make your search a lot simpler in the long run.

By being incredibly thorough and enacting all these helpful tips, you can find the best possible policy for your unit’s needs. But no plan is perfect - so continue on to the next section for a very important reminder for property owners.

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Reviewing and updating your insurance policy

As mentioned earlier, no property is 100% safe from hazard or risk. Even if you make use of the best home safety tips for you and your loved ones, you may still be at risk of unexpected perils, like accidents or natural disasters.

Given this reality, you must review and update your insurance policy as regularly as possible. By being vigilant over the current terms of your coverage, you can ensure that your unit is protected from all kinds of dangers over a longer period.

If you experience any major life changes, like getting married or moving houses, you’ll also need to update your policies accordingly. Remember to regularly evaluate the coverage for your property, to see if it still applies to your lifestyle. This way, you can rest assured that your investment and your day-to-day life are protected, even from the most unforeseen circumstances in the future.

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Key takeaways

Ensure your home is protected against risk by insuring it with the best policies possible. Shop for the perfect contract for your needs with these final few reminders:

• Do thorough research. Read up on the topic of condominium indemnity policies to avoid getting lost in the ins and outs of this complex financial commitment.
• Compare contracts. By studying and analyzing the contracts available to you, you can negotiate the plan you deserve for your home.
• Consult with the experts. Don’t be afraid to consult with and ask questions from your agent or respective property management office to ensure you’re getting the best contract ever.

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