Condo Media - February 2020 - 18

Homeowner's Corner

Critical Component:
Insurance Ours and Yours
Of the many things your association assessment pays for,
insurance is one of the most important. Association governing
documents and state law require the association board to
purchase adequate insurance as part of a comprehensive riskmanagement program.
THE ASSOCIATION'S INSURANCE
PROPERTY
Property insurance covers loss of or damage to any common
structures or physical property caused by fire, flood, storms
or other natural events. For instance, if high winds uproot
a tree that damages a common roof, the association's
property insurance would cover the cost of repairs. Property
insurance may also cover "human perils" (such as theft) and
"economic perils" (such as stock market fluctuations) that
might impact the association's investments.
LIABILITY
Liability insurance covers losses that would result if
someone took legal action against the association for an
injury, financial loss or other type of damage. For example,
one important type of liability insurance, called Directors'
and Officers' insurance, covers volunteers like board and
committee members so they're not jeopardizing their
personal assets to serve the association.
The association's insurance does not cover owners or
residents, their homes or belongings. Each member should have
his or her own insurance policy. If you need information about
homeowners insurance, talk to a licensed insurance agent who
specializes in homeowners associations. Or you may want to
talk to the association's insurance provider; this person will
know exactly where the association's master policy coverage
ends and where yours should begin. This prevents you from
over- or under-insuring yourself.
TIPS FOR SAVING ON HOMEOWNERS
AND RENTERS INSURANCE
Whether you own or rent your home, insurance is essential
to protect your property and household goods. Comparison
shopping for the best rates will certainly save you some money,
but you also can save by following these tips:

CONDOMEDIA February 2020

■ Choose a higher deductible-increasing your deductible by
just a few hundred dollars can make a big difference in your
insurance premium.
■ Ask your insurance agent about discounts. Dead bolts,
smoke and carbon monoxide detectors, security systems,
storm shutters and fi re-retardant roofi ng material are
just some of the home safety features that can often lower
your rate. You also may be able to get a lower premium
if you are a long-term customer or if you bundle other
coverage, such as auto insurance, with your provider.
Some companies also offer senior discounts for customers
who are older than 55 years.
■ Don't include the value of the land when you are deciding
how much coverage to buy. If you insure your house, but
not the land under it, you can avoid paying more than you
should. Even after a disaster, the land will still be there.
■ If you're a renter, don't assume your landlord carries
insurance on your personal belongings. She or he likely
doesn't. Purchase a separate renters' policy to be sure your
property-like furniture, electronics, clothing and other
personal items-is covered.
Don't wait until you have a loss to fi nd out whether you
have the right type and amount of insurance. For example,
many policies require you to pay extra for coverage for highticket items like computers, cameras, jewelry, art, antiques,
musical instruments, and stamp and coin collections.
Furthermore, not all coverage will replace fully what is
insured. An "actual-cash-value" policy will save you money
on premiums, but it only pays what your property is worth
at the time of loss (your cost, minus depreciation for age
and wear). "Replacement" coverage gives you the money
to rebuild your home and replace its contents.
Finally, a standard homeowners' policy does not
cover flood and earthquake damage. The cost of a
separate earthquake policy depends on the likelihood of
earthquakes in your area. Homeowners who live in floodprone areas should take advantage of the National Flood
Insurance Program.

Condo Media - February 2020

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