Homeowner’s insurance 102: condos
Condo homeowner’s insurance is a little different than insurance bought by the sole owner of a single or multifamily house. When you buy a condo, there is already insurance in place that you are, basically, stuck with. You sign onto the existing policy. After you buy, you can discuss changing it with your co-owners.
Condo insurance is not standard. You will need to talk to the insurance agent who is handling the current policy. The insurance may cover only the common areas “to the studs” of your unit. The insurance may cover your unit. The insurance may have liability that covers you sufficiently; maybe not. You need to know!
I recommend that you get any additional coverage from the same company. You do not want to have a loss where the inside and outside of your unit are damaged and the insurance companies are passing the buck.
The insurance agent will still need to send a binder to the closing attorney. However, with a condo, you don’t need to buy a year’s worth of insurance ahead, since the policy is in place. You just need to pay for any additional insurance your lender requires or you want, set to start in your name and your lender’s name on closing day. Then at closing, you will pay the seller back for insurance he/she/they have already paid for.
Some of my clients switch companies as soon as they can get their co-owners to OK it. Some are happy with the insurance that is in place. Like so many things in a condo, any change has to be discussed. Therein lies the problem for some. Anyone had ongoing discontent with homeowner’s insurance that they were stuck with because of their condo association.
Other sticky problems include co-owners that are doing things that are no-nos for the insurance company, like having a trampoline in the yard or an undisclosed pool. Remember that in a condo, your liability it their liability and vice versa. As Attorney Vetstein wrote, liability can be a tricky thing when it gets to the courts.
Do you feel sufficient covered in your condo insurance? Have you had a condo co-owner who made your fear for your liability?
