When purchasing a condo, one of the steps on your checklist needs to be securing condo insurance. While not a legal requirement, it provides critical coverage to protect your investment. Added to that, many corporations won’t allow you to buy a condo without it.
However, as with many types of insurance, understanding what factors go into your quote can be quite confusing. Here, we’ll take a closer look to help you make a more informed decision and perhaps save some money on your premium.
What is Condo Insurance?
Before looking into condo insurance, it’s important to note exactly what it covers. It has a few key differences from homeowners insurance, but the common traits are that it will cover the interior of your unit and your personal belongings inside. Added to that, it will give you liability protection.
What isn’t covered is the structure of the building. That’s because it’s protected by the condominium master policy. Therefore, you don’t need to worry about this being covered by your policy. This also applies to liability claims that happen outside of your condo.
Related Article: https://bucklerins.com/what-does-condo-insurance-cover/
Key Factors Influencing Condo Insurance Rates
Now we know what condo insurance rates cover, let’s take a close look at the biggest factors that can affect your premium.
Condo’s Value and Replacement Cost
The value of the interior of your condo and what it contains are one of the biggest factors. Higher-value condos with more luxurious finishes are going to naturally cost more to insure. On a related note, the larger the condo, the more area needs to be covered as well.
Location of the Condo
The location of your condo can impact your insurance rates. Natural disasters can impact premiums, but the risk of flooding and earthquakes damaging a Canadian condo is very low and, therefore, isn’t a significant factor. A more significant factor can be the crime rate in the area. The higher the crime risk, the more you’ll need to pay for condo insurance.
Building Age and Construction
You may not need to cover the costs of building repairs, but its construction can still impact your rates. If the building has outdated electrical or plumbing systems, the risk of fire or flooding becomes much higher. Newer buildings with more modern materials will usually have lower premiums.
Coverage Limit
You can set a limit on how much coverage you need. If you have valuable items such as premium electronics, jewelry or art, you’ll likely need to increase your limit. This will increase costs, but it’s vital to ensure you have adequate coverage.
Deductible Amount
The deductible is the amount you pay before you can start a claim. Choosing a higher deductible will lower your premiums, but it does mean you’ll have more to pay should you need to make a claim. Choosing a lower deductible may be a better option, even if it does come with higher premiums.
Claims History
For any type of insurance, your claims history can have a significant impact. If you have a history of frequent claims, the insurer will presume you’re at high risk of making frequent claims in the future. A clean claims history will mean lower rates.
Safety and Security Features
If your condo has more advanced safety and security features, this can have a positive impact on your rates. Examples include smoke detectors, fire alarms, sprinkler systems, and security cameras. These features are likely to reduce the chances or cost of claims.
Type and Amount of Coverage
There are different types of coverage available and optional extras that you can add to your policy. The basic coverage is going to be the cheapest but it’s worth looking at other coverage options to get the protection you need.
Occupancy and Usage
If your condo is permanently owner-occupied, this is going to be the cheapest option. If you plan on renting out your condo, you’ll need additional coverage which will come at a higher cost.
Related Article: https://bucklerins.com/how-much-is-condo-insurance-in-toronto/
Tips to Lower Your Condo Insurance Premiums
Now that we know the factors that affect your condo insurance rate, we can look at ways you can reduce your premiums.
Increase Your Deductible – If you opt for a higher deductible, your premiums will come down. However, it’s important to consider the financial risk that comes with this.
Bundle Insurance Policies – Look to see if your insurer can bundle policies together. If so, this can come with a lowered overall cost.
Improve Safety and Security – If your condo is lacking in safety features, then make sure to add them. Adding smoke detectors, cameras, and water leak sensors can be a great idea.
Clean Claims History – Try to avoid making minor claims that you can afford out of your own pocket. This will help to reduce your rates for when you need to make a larger claim.
Compare Quotes – All insurers assess risk differently and, therefore, charge different premiums. Make sure to shop around or let an insurance broker do the hard work for you.
Final Thoughts
Thankfully, condo insurance isn’t as expensive as many other types of insurance. Even so, you want to make sure you’re not paying more than you should. By knowing the factors above, you can have much more clarity about what goes into the cost of your premium.
If you feel your premium is too high, then you can take the steps above to try and reduce it. If you’re interested in condo insurance, contact Buckler Insurance today. We’ll happily answer any questions and find the best condo insurance quote for you.
