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How much insurance do you need to get for a condo?

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How much insurance do you need to get for a condo?

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Old 09-02-11, 09:35 AM
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banerjek
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How much insurance do you need to get for a condo?

My wife and I are finalizing the purchase of a condo and need to get insurance. When we went to the agent, we were surprised not to even get a recommendation for how much we need.

HOA fees cover insurance on the structure and other things that affect everybody. So it would stand to reason that we do not need insurance that is worth as much as the entire unit. On the other hand, we need to be covered in case the inside of our unit gets burned up, a pipe bursts and floods us and the unit below, and other scenarios so this logically would be more than we'd get if we were renting.

How do we figure out what we need? Thanks.
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Old 09-02-11, 09:37 AM
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You could use two....., wait, condo, oh never mind.
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Old 09-02-11, 09:47 AM
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Originally Posted by banerjek View Post
My wife and I are finalizing the purchase of a condo and need to get insurance. When we went to the agent, we were surprised not to even get a recommendation for how much we need.

HOA fees cover insurance on the structure and other things that affect everybody. So it would stand to reason that we do not need insurance that is worth as much as the entire unit. On the other hand, we need to be covered in case the inside of our unit gets burned up, a pipe bursts and floods us and the unit below, and other scenarios so this logically would be more than we'd get if we were renting.

How do we figure out what we need? Thanks.
Well there are two factors to think about, insurance to cover things like thefts or damage to you interior and a general liability policy in case I come over slip & fall, and decide to sue you.
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Old 09-02-11, 10:08 AM
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If the HOA fees cover the building, all you need to cover is the contents, no? What are your contents worth?

Disclaimer: I am not from nor reside in the US and am not an insurance type. Maybe check with a broker.
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Old 09-02-11, 10:25 AM
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Step one, find a better agent.

Step two, find out what the HOA insurance will cover for YOU. Will it cover your living expense while repairs are made, other costs it will cover.

You'll need coverage for your personal items, any additional liability and theft. A good agent will have knowledge and experience with this type of coverage.

Oregon Insurance Commission may help. http://insurance.oregon.gov/consumer...nter/home.html

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Old 09-02-11, 11:14 AM
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You need a better agent, they should be able to help you with this. I can tell you from experience learned the hard way, trusting the agent the HOA has used for years isn't a good idea. He's being replaced unless his competition is a worse than he is.

I'm pres of our association, and the underground parking/storage locker/laundry all flooded to about 3 feet in July. Comprehensive auto insurance covered the cars (State Farm was last in competence in service in that area if you're interested), and the homeowners insurance covered the belongings in the storage lockers. People were understandably upset after the flood, but I haven't heard of any of the 40 owners collecting anything on their homeowners policies due to either deductibles or the low (financial) value of the contents of their storage lockers (old family pictures etc...).

I'm not sure if this answers your question or not, but don't be afraid to ask questions. The fine print did exclude some damages and a few people wished they'd asked more questions about their insurance before the flood and found out that water that comes down is treated differently from water that comes up and requires a different policy.
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Old 09-02-11, 12:59 PM
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As a risk manager, I know a fair amount about insurance and am an expert on malpractice insurance. But I may be able to be of some help here.

First, the agent may not be making a recommendation on policy amounts due to his own malpractice exposure. If he recommends an amount, but then you have a loss exceeding the amount of your insurance, you may be able to successfully sue him for negligently recommending such a low amount of coverage. In my field, no agent or broker will ever recommend policy coverage amounts any more just for this reason.

Second, it is not uncommon for condo insurance to cover the condo structure from the outside walls to the exterior or interior surface of the drywall. So you would need to find out what the existing condo insurance from the HOA covers. You may only need coverage for the contents and some of the structure. Condo insurance can be much like renter's insurance in this regard.

At a minimum, you want coverage for liability and damage to the contents, and probably structural coverage too, for such things as a water pipe bursting, or the dishwasher leaks and destroys the first floor flooring or the like.

In terms of liability, I have minimum limits of $ 300,000 liability on my homeowners and auto, and the personal umbrella policy adds an additional $ 1 million coverage for most auto and homeowners' liability exposures. For structural, I have replacement cost for the structure, written on the standard HO-1 homeowners policy. I have $ 1000 deductibles on everything.

You should be using your own agent, and not the agent of the HOA for this. If you are using your own agent, I can see why they aren't recommending policy amounts, for the reason cited above, but they should be able to tell you what type of condo insurance to get,. If they aren't, find another agent or broker.
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Old 09-02-11, 05:28 PM
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Get full coverage for inside and out. You will be living in a multi-tenant property and if you share walls with another condo owner will depend on your neighbors to not do anything stupid like leave hot appliances on or stoves/heaters on. Hoa's here will cover daily exterior maintainance but don't always cover fire damages especially if they feel it's the homeowner's fault. Until the HOA and the homeowner settle their differences, I have seen damaged exterior walls remain for months. Any unfortunate neighbors that have been affected will also have to wait for the differences to settle before their property gets repaired also, unless they have the means to repair their property per the requirements of their condo community. I have seen many condo owners have to fork over big money after fires or weather disasters and repair their owner property and later settle with HOAs in court.

Here in Dallas, I work as an apartment inspector. Condo's are vaguely under my jurisdiction since neither Dallas General Code nor I really wish to tangle with them. Property owners are legally responsible for any repairs needed on their homes/townhouses/condos. This is regardless of what any condiminium contract may state, so...

Bottom line is to get full coverage so that you aren't left out in the cold if you happen to get an unscrupulous HOA like there are here in Dallas.
Ernest

PS: Of course, check with your local ordinances. If your city enforces private/ condiminium contracts then it's win/win, you can save and just cover the interior.
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Old 09-02-11, 06:06 PM
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what miilcreek & Big_e said, AND you want to make sure the coverage provides for some sort of intermediate rental for you for some number of months - if something happens and you need to live somewhere else while repairs are made. You want coverage for fire, flood, wind, water damage, plus for furniture and all other personal items. Just like home insurance, anything you own that is out of the ordinary (like, maybe some expensive bikes? silverware set? paintings? antiques?) should be itemized for additional coverage.
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Old 09-02-11, 07:09 PM
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Find a new insurance agent.
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Old 09-03-11, 11:48 AM
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Originally Posted by banerjek View Post
My wife and I are finalizing the purchase of a condo and need to get insurance. When we went to the agent, we were surprised not to even get a recommendation for how much we need.

HOA fees cover insurance on the structure and other things that affect everybody. So it would stand to reason that we do not need insurance that is worth as much as the entire unit. On the other hand, we need to be covered in case the inside of our unit gets burned up, a pipe bursts and floods us and the unit below, and other scenarios so this logically would be more than we'd get if we were renting.

How do we figure out what we need? Thanks.
How much of the building does the HOA insurance cover? Sheetrock? Studs? Floor? Subfloor? Wow, lot of possibilities there.
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Old 09-06-11, 09:24 AM
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banerjek
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Originally Posted by HardyWeinberg View Post
How much of the building does the HOA insurance cover? Sheetrock? Studs? Floor? Subfloor? Wow, lot of possibilities there.
Basically, it's everything until you get to interior surfaces (so yes to all of those things). We're working through a number of issues right now, but it appears that we'll need quite a bit of coverage which is not a problem since we were expecting that.
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Old 09-06-11, 09:30 AM
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Originally Posted by MillCreek View Post
First, the agent may not be making a recommendation on policy amounts due to his own malpractice exposure. If he recommends an amount, but then you have a loss exceeding the amount of your insurance, you may be able to successfully sue him for negligently recommending such a low amount of coverage. In my field, no agent or broker will ever recommend policy coverage amounts any more just for this reason.
Bingo.
Ex-insurance agent here. We were specifically trained *not* to make recommendations for this reason.
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