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Understanding Condo Insurance

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Looking for Bethesda for sale? The community’s condos and townhomes are centrally located, giving residents access to shops, restaurants, and offices. But once you do find a property you like, you must take steps to protect your investment.

Here’s what you need to know about condo insurance in Bethesda and the surrounding areas.

Is condo insurance mandatory?

Whenever you apply for a mortgage, it’s common practice for lenders to require buyers to purchase insurance for the property. This will protect the lender’s interest in the property in case anything untoward happens, such as a fire or vandalism. Unless you own the property outright, you will be compelled to get condo insurance.

Buyers should also be mindful of the difference between condo insurance and regular homeowners insurance. Condos are located within housing developments governed by a Condominium Association, similar to a Homeowners Association (HOA).

Policies on condo insurance and ownership may differ from one development to the next. But in most instances, when you purchase a condo, you pay monthly condo dues that go toward a Master Insurance Policy that covers common areas and the overall physical structure of the condo building.

This policy will protect you from liability charges stemming from third-party injuries sustained in common areas.

However, the Master Insurance Policy typically does not provide cover damages to the interior of the unit. For this kind of coverage, Maryland condo owners must take out an H-06 Policy, a specialized kind of homeowners insurance for condo properties.

Why you need condo insurance

The H-06 Policy is meant to provide extensive coverage that meets the unique needs of condo owners. It typically covers “walls-in” contents such as your personal belongings in case of a fire, extreme weather, or theft.

But more importantly, it provides protection against various liability charges you may face as a result of untoward events within the unit.

And according to Trusted Choice, this policy can offer protection from slander or libel charges.

If you intend to use your luxury condo as a rental, you may obtain coverage through a Landlord Insurance Policy.

Tenants can get coverage through a Renters Insurance Policy to protect themselves from liability charges while they occupy the unit.

How to choose the best condo insurance plan

Trusted Choice offers the following tips for buying condo insurance:

  • Certain condo insurance policies will impose limits on how much coverage is included for categories including furniture, electronics, artwork, and jewelry.
  • Should the value of your luxury condo vastly exceeds conventional limits, experts recommend purchasing additional riders, or endorsements, for sufficient coverage.
  • If your condo is located on the ground floor or below ground, experts strongly recommend purchasing a Flood Insurance Policy to supplement a basic plan.
  • Maryland condo owners and residents whose properties fall within flood zones can qualify for insurance via the National Flood Insurance Program (NFIP).

Ready to find the right Bethesda condo? You can reach Heller Colley Reed of Long and Foster here. You can also reach the team at 888.907.6643, 301.674.2829, and HellerColeyReed(at)gmail(dotted)com for more information. They are the #1 luxury condo team in Maryland and the surrounding areas. Your business is in good hands.