Condominium Insurance

Most Condo/Town-home owners are not aware that they do not have homeowner’s insurance coverage. Sure the Homeowners Association (HOA) takes out insurance on the buildings and common areas, but what about the owner’s personal property, liability coverage and the inside of the property? Who is responsible for repairs on the inside like flooring, drywall, paint and carpentry? Also what happens if the Condo/Town-home is burglarized? Who pays for the lost property? What happens if the HOA assesses a huge loss and transfers a portion to each individual owner?

Most owners never think about these things until it is too late. I remember we had a pretty bad winter in CA back in 2004; there were a lot of windstorms and rain that winter. The HOA I belong to incurred a big loss. Many of the unit owners needed roof repairs as well as water damage repair on the inside of their Town home. The HOA responded quickly and everyone was taken care of, but the end result was a $4,000 bill to all the owners. My Loss Assessment coverage paid my portion, but many of my neighbors had to dip into their pockets and pay it themselves. A couple of months ago I had a conversation with my next-door neighbor about that and said he was still paying that bill almost four years later.

A friend of mine (who isn’t insured with me) had a major loss to his town home a couple of years ago. His master bathroom’s sinks, located on the second floor of his property, and was leaking while my friend and his wife were away on a four-day weekend getaway. His property is located in an upscale luxury town home community in Southern California, but the insurance broker who sold him his Condo insurance didn’t know or even bother to ask about the property characteristics. The total building structure on his policy was $6,400.00 and the repairs cost almost $60,000.00 the insurance company paid their share and my friend had to dip into his line of credit to pay the difference.

HOA Insurance policies are meant to protect the HOA from damages to exteriors and liability coverage on common use areas. Those policies do not provide coverage for you and me as owners when we have a loss inside our unit. A Condo / Town-home Insurance policy is very affordable and can provide great coverage when you need it, so do yourself a big favor and call your insurance agent to ask if they can insure your property. Most insurers will also give you an additional multi-policy discount if you let them insure your Auto and Property. Those discount usually come out to be anywhere from 10% to 20% of your annual premiums.

Why Renters Insurance?

Most renters think that their landlords’ insurance will cover them in case their property is stolen or destroyed in a fire. WRONG! The only thing your landlord is concerned with is that his/her insurance company repairs damages to the property and cover the loss of rent due to a covered loss. Your landlord cares about their property and not yours.

Your landlords’ policy will not replace your cloths, your shoes, your furniture, your laptop, your ipod, your DVD’s … you get the point right?

Renters insurance policies is what you buy as a tenant to protect your property in case of a covered loss. This is the policy that will replace your personal belongings in case you are burglarized or lose everything in a fire.

Most Renters policies will put you back $100 - $200 per year and you will probably save twice as much on your auto insurance policy if you buy it from the same insurance company.

Personal Property coverage – Are you covered?

I recently added coverage for a $15,000 watch to one of my client’s policy. I found out about the watch by accident while running in to my client in a social event. The watch was a 25th anniversary present and my client assumed it was covered on their homeowner’s insurance policy. I added coverage to the policy the following day and made a note to write about it on my blog, so here we go:

Most homeowner’s policies have inside limits for certain items like Jewelry, Watches and Furs. My company covers those items up to $2,500 at a maximum of $1,000 per item which sounds low, and is actually considered the industry standard in CA. Some companies offer higher limits but not much higher.

There are two ways to add coverage for these types of items:

Scheduled Personal Property (SSP): Add coverage for a $15K item (in this case it was a Rolex watch), provide a copy of the receipt, or an appraisal (by a certified specialist) to your insurance company, and pay additional premium and deductible on that item. In case of a covered loss you will be able to recover what your item is worth less the deductible amount.

Blanket Coverage Endorsement: This won’t work for a single item of that value; however it is very effective and much cheaper if you have several items totaling $15K or $20K. This option lets you increase your policy’s inside limit to accommodate your property value at a much lower cost to insure. You can get your limit increased to let’s say $20K blanket coverage at a maximum of $5K per item, so if you have a few items that do not exceed $5K each you will be able to recover their cost in case of a covered loss.

Call your insurance Agent/Broker right now and ask what type of personal property coverage you have. If they tell you everything is covered ask for it in writing, ask to have a policy mailed to you and read it cover to cover and make sure you know what is covered and is not.