Insurance and Condos

[NBMisha]

So, in a midrise or high rise, what is the insurance obligation? Is the purchase price deemed the full replacement cost to be insured? Does the association insure "common", and what's the right fraction to assume? How does one assess the needed insurance?

Recommendations for independent Austin insurance agents?

 

[CleverNickname]

It varies. Usually the Condo Assoc pays for the building as a whole, to your studs. You pay for the finish out (in theory, the drywall, carpet, appliances, etc). They would also cover the common areas. Your policy would cover the insides.

 

[AustinTejasFan]

The unit owner needs a homeowners condo policy. It will cover fixtures, alterations and improvements and betterments within the unfinished perimeter walls, floors and ceilings as well as personal property.

Make sure policy limits are sufficient for both. Any questions, call Personal Lines Division, Department of Insurance @ 512-322-2266.

 

[bluto]

both posters are correct. you will basically be paying two insurance payments... one that the association/condo regime has in place for the common elements and one for your interior.

 

[12thStudStan]

"Common area" can vary from place to place. Read your association declaration and bylaws and estimate your replacement cost of your personal property and condo improvements accordingly. The ideal situation is to have a homeowner-condo policy from the same insurance company that has the master policy, provided that company is reputable and the policy coverage is adequate. I sat on a condo HOA board for several years and the only claims/coverage issues I saw were when there were two different insurance companies involved or when there was insufficient coverage on the part of the condo unit owner.

 

[NBMisha]

Thanks to all for good advice and more.

 

[TxEx2x]

Above posters are correct...
Along the same lines, you will need to read your condo docs very closely to see if they spell out what individual unit owners are responsible for in regards to damages. I was on the board of a condo HOA where one unit had a leaking ice maker that flooded the unit next door. Due to the way our rules were written, the unit that got damaged had to cover their own expenses. They were lucky enough to have insurance, and both insurance companies agreed that theirs was the one to cover it. The unit with the faulty ice maker didn't have to cover anything. Needless to say, the HOA changed the rules. The HOA would have been better off (from an insurance/liability standpoint) to change the by-laws, but that is VERY difficult to do in a HOA situation. Just something to look for when you're thinking about buying a condo. Also, my mortgage co. was interested in verifying the master insurance policy (held by the HOA), but never asked for my individual condo policy. I know several of my neighbors didn't carry one... I STRONGLY advise getting one.