Choosing condominium insurance is essential to protect the building, the communal areas and the residents against unforeseen events that could result in high costs. Given the range of options available on the market, it is important to understand what cover is required and how to find a suitable solution.
To make an informed decision, it is important to assess the risks associated with the property, compare the terms of the policies and strike a balance between cover and your budget.
Why is it important to have condominium insurance?
Condominium insurance helps to protect the building against certain unforeseen events, such as fires, water damage or natural disasters, provided these are covered under the policy. It may also include cover for communal areas and third-party liability for damage caused to others.
In Portugal, fire insurance is compulsory for buildings organised under the horizontal property regime, to cover the individual units and the common areas. However, this cover does not necessarily cover all risks, so it may be important to take out additional cover.
How to choose condominium insurance, step by step?
To find a suitable policy, start by assessing the building’s characteristics and identifying the most significant risks. Then, compare the available quotes and analyse the terms and conditions of each insurance policy.
1. Assess the building’s requirements
Before taking out insurance, bear the following factors in mind:
- Size and communal areas: check whether there are garages, lifts, gardens and other shared spaces.
- Location: assess exposure to risks such as flooding and storms.
- Condition: take into account the age of the building and the condition of the structure.
- Reconstruction value: check that the sum insured is sufficient to cover the cost of rebuilding the property.
This assessment makes it possible to identify priority areas of cover and avoid gaps in protection.
2. Find out about the essential cover
As well as compulsory fire cover, there are other types of cover that may be useful:
- Water damage: cover for certain leaks or burst pipes.
- Natural phenomena: cover for storms and floods, where taken out.
- Third-party liability: protection against certain claims for damages caused to third parties.
- Common areas: cover for roofs, façades, staircases and garages.
- Condominium assistance: support in emergency situations, provided this is included in the policy.
Before taking out a policy, check the exclusions, excesses and compensation limits. These conditions determine the actual scope of the cover.
3. Compare prices and terms
The insurance premium is important, but it should not be the only factor to consider. When comparing quotes, consider the following:
- Price: the cost of the insurance and the payment terms.
- Excesses: the amounts that may be payable by the insured person.
- Exclusions: situations not covered by the contract.
- Indemnity limits: the maximum amounts provided for each type of cover.
To gain a better understanding of the terms used in contracts, you can refer to the definition of an insurance policy.
4. Confirm the sum insured
The sum insured must correspond to the cost of rebuilding the building, taking into account its characteristics and the materials used, and not merely the market value of the property.
It is equally important to check that the figures are up to date and that the policy adequately covers both the individual units and the communal areas. This reduces the risk of insufficient cover in the event of a claim.
How can condominium insurance be tailored to the building’s needs?
Every building has its own characteristics. A block of flats with an underground car park and lifts, for example, may need different cover from that of a smaller property.
Therefore, the choice should prioritise the most relevant cover, without unnecessarily increasing costs.
Did you know that…
Fire insurance does not automatically provide cover against all damage that may affect the building. Certain types of flooding, burst pipes or third-party claims may require additional cover.
For this reason, it is advisable to review the policy from time to time and check that it continues to meet the needs of the block of flats.
Why does choosing the right insurance make a difference?
Imagine a building with ten flats whose roof is damaged following a storm. If the insurance policy does not include cover for such an incident, the repair costs may have to be borne by those responsible, in accordance with the relevant obligations.
If there is cover for such damage, the insurer may cover the eligible costs, subject to the agreed limits and conditions. This example illustrates the importance of assessing the cover provided, rather than choosing a policy based solely on price.
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Conclusion
Choosing condominium insurance involves assessing the building’s characteristics, identifying the risks and comparing the available cover. Checking the excesses and keeping the sum insured up to date are essential steps in finding a suitable solution.
Cláudia Dias
