I’m closing on my condo later this month and nobody can agree on what type insurance I need. The real estate agent, mortgage loan officer and insurance agent all give me different stories. Obviously I need insurance to cover my personal possessions and the association covers exterior insurance. But don’t I need insurance to cover stuff like damage to interior walls if there was a fire or broken pipes?
A Condo policy will cover everything from the drywall in, as well as your personal belongings, liability for damage to the building itself, voluntary medical payments and a living allowance if your place is not habitable due to an insured peril. I don’t know where you live, but in Canada, that is the answer an insurance broker or agent will give you.
Ginger of the North has it right. You need what is known as a condo policy, and if your agent can’t help you, find another agent. Also look at your CC&R’s, because they may specify what type of insurance you need (at my place, for example, we’re required to carry a certain amount of earthquake insurance).
Not only do you need to protect your interior from damage done to the interior by something in the interior, you also should consider insurance to protect you from a special assessment if there is damage to the common areas. For example, if there’s a fire on the exterior of Unit 1, all the units will share in the cost of fixing that. Your association will carry insurance, but there may be a high deductible, and depending on the status of your reserves, the association may have to assess members to pay it.
As for who you can rely on, ignore your real estate agent for now. Ask your mortgage loan officer what insurance the loan requires you to carry. Then call the president of your soon-to-be HOA. Ask that person what insurance s/he carries and who their agent is. Call that agent and get a bid, then go back to your agent with that information and get another bid.
It sounds awfully complicated, but it really isn’t once you start getting down to it. Congratulations on your purchase and good luck.
peedin
Here’s a good description of an HO-6 (condo owners) policy.
Besides covering your personal property, the policy also will include coverage for personal liability in case someone is injured while on your property.
Congratulations on your new home.