Why Condo Owners Should Invest In Condo Insurance NJ

Why Condo Owners Should Invest In Condo Insurance NJ

If you recently invested in a condo in New Jersey chances are you were surprised at the fact you were not required to provide proof of condo insurance to close your home mortgage loan. Condo owners insurance is considered an optional coverage because the association provides coverage for the dwelling and the common areas of the property. While condo insurance NJ is not technically required, choosing not to invest in condo insurance can cost you a considerable amount of money. Understand what is not covered by your association insurance and how condo insurance steps in when you suffer a loss.

Building Property

The dwelling, which is the actual structure of the condo, is covered on an association policy. While many condo owners assume their personal space is covered on the primary policy this is far from the truth. Association policies do not cover your condo from the drywall in. This means that drywall, paint, flooring, fixtures, cabinetry, or any other fixed property inside the condo is considered your responsibility. Contractors report that it can cost between $50 and $100 per square foot to rebuild the interior space of a condo. This means you could be responsible for as much as $100,000 of rebuild costs if you own a 1000 square foot condo. Condo insurance provides Building Property coverage to cover these costs.

Loss Assessments

You pay quite a bit of money per month towards association fees. You would expect these fees to be applied towards insurance and other incidental costs of managing the property. If a loss occurs, each owner can be assessed a portion of the loss to pay for the association deductible. These assessments can range between $1000 and $25,000. Understandably, you do not have $25,000 laying around to apply towards the cost to rebuild the entire complex. Condo insurance NJ offers loss assessments cover to pay for fees you may be assessed when a loss occurs within the complex.

Liability Coverage

Condo Insurance also provides coverage in the event you are sued. If an individual visits your property and is injured they can claim you were negligent for their injuries. Lawsuits for injuries and negligence can become very costly without protection. The standard unit owner insurance policy provides $100,000 of liability coverage for claims occurring anywhere in the world. You can increase these limits for additional premium.

Choosing not to invest in condo insurance NJ could cost you far more in the long run. Premiums are extremely affordable and most insurers offer multi-line discounts if you carry auto insurance and condo insurance as a package deal. Do your research and visit your agent to obtain a quote. When you review the coverage and the premium you will quickly realize that the optional coverage should be considered a requirement.

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