Deciphering Your Premium Payment

See which factors affect the cost of your condo insurance.

Whether you’re shopping for a new condo insurance policy or need to update your current one because you’ve recently renovated, one thing is probably at the top of your mind: the premium. Use this checklist to help evaluate your condo and property so that you’re aware of factors that influence the cost of your condo insurance.

1. Your Condo’s Location

Where you live tells insurance companies several things: environmental exposures (e.g., floods, hurricanes, earthquakes or wildfires), accessibility to fire services and local construction costs. All these factors can influence an insurance company’s premium for condo coverage.

2. The Condition of Your Condo

Consider the maintenance of your electric, heating and plumbing systems, and remodels or updates. Substantial upgrades, such as hardwood floors or granite countertops, may require more coverage and, therefore, add a bit to your premium.

3. The Estimated Cost to Rebuild Your Condo

The cost of rebuilding your condo after catastrophic damage is not the same amount as what you paid when you bought it. Reconstruction costs may be affected by labor costs, square footage of construction, materials and changes in local construction codes.

You’ll also need to know what type of master policy your condo association has: “bare walls” (i.e., covers only ceilings and floors, not fixtures) or “all in” (i.e., includes the unit’s structure).¹ If your master policy is “all in,” you don’t need as much dwelling coverage. If it’s “bare walls,” your dwelling coverage limits should be high enough to pay to replace everything inside your condo, including appliances and fixtures. Your insurer may ask for a copy of the master policy to read the language specific to your association.

4. The Cost to Replace Your Belongings

From electronics and furniture to artwork, clothing and kitchenware, your belongings help make your condo a home. Now, think about how much it would cost to replace those items if you experience a loss.

Conduct a home inventory to help assess the value of your belongings. It’s also a handy record of all your items if you need to file a claim down the road.

It’s important to know what factors – in addition to your claims history and credit score – insurance companies are considering when they give you a quote for condo insurance. Your premium may change with your circumstances and level of risk.
 

• Coverage may vary by state and policy.