Last week, we discussed the master insurance policy, which covers the collectively owned parts of the condo building.
The unit insurance policy, called a type H06 policy, is necessary to insure the interior of your condo in case of damage. Banks require this when purchasing a condo with a mortgage, typically asking for a policy worth 20% the appraised price of the condo. This policy will cover your interior walls and all the large fixtures that are attached to them – cabinets, bathtub, fireplace, etc.
Along with the standard unit policy, you will also have the option to insure your personal property, covering everything inside the condo that belongs to you but is not attached to the walls, such as furniture and personal belongings, and protecting them in case of damage or theft. This part of the policy is optional, but is generally a good idea because it does not raise the price of your policy significantly. Adding up the approximate cost of your belongings will ensure you get a policy that is adequate but not excessive.
In addition to these two main parts of the unit owner’s policy, you will have an option to get liability insurance (some banks actually require this), which protects you in case someone gets hurt while inside your condo and decides to take legal action against you. Like personal property insurance, this add-on is very affordable and generally a good idea to have.
When you’re purchasing your unit insurance, you will get to choose a deductible for the policy. As with other insurance policies, a higher deductible will result in a lower premium and vice versa, so you choice will be up to your individual risk tolerance.