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Before buying HO6 condo insurance, a condo owner or renter must consult with the condo association in their area to determine what coverage levels are already in place. Most associations will buy a master policy for the complex so that the owners and renters only have to purchase additional coverage for personal insurance. It is very important that one buys adequate coverage for their possessions as the building structure is already covered in the master policy. This will guarantee safety of all the items they own and replacement should anything happen to them. For this, you must know the value of your possessions, how much coverage is enough to guarantee their safety, how much coverage you can afford, what type of coverage you want (is it replacement cost or cash value) and what the coverage limits are for each item. Determining the value and coverage of your possessions The insurer can help you determine the value of your possessions and what coverage is suitable for them, but there is a basic way to go about it, even on your own: 1. Evaluate each item in your possessions and find out how much it would cost to replace it. Do this for all your belongings. 2. Next evaluate the different policies available, matching them against the valuation of your possessions. Replacement cost or actual cash value? Cash value coverage compensates damaged items after factoring in depreciation. In most cases, the amount paid out in cash value compensation is less than the market value of the items. Replacement cost on the other hand compensates damaged items with others of similar value. Coverage limits Many HO6 condo insurers in Texas put a limit on how much coverage valuables can get. This limit however varies from one company to another so it is best to ask what the limit is beforehand, so that you can find out whether it will adequately cover your items or not. If you feel that the limit given is inadequate, purchase additional coverage to ensure full protection of your unit.
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