Condo Insurance Requirement?

[kushdrone]

Jurisdiction

Missouri

I am buying a condo, and I feel that my insurance company is trying to charge me too much despite having multiple policies with them (car + home) and a generous discount from my employer. Maybe I am asking for more insurance than I really need. I tried to read the condo bylaws (see image below) and it seems I am only responsible for personal property and liability insurance, but the wording is so confusing. I can't tell what the HOA will cover and what I am responsible for. Am I responsible for anything other than personal property and liability insurance? If so, what else?

 

[army judge]

If I were you, I'd discuss the requirement with your current carrier, and get at least three quotes from other insurers.

Take the HOA requirement with you when you visit the insurance agents seeking quotes.

The type of insurance you're required to carry is reasonable, but be sure to get the deductible you can comfortably afford. If coming up with $5,000 within a couple days would be difficult, check the cost of a deductible you can afford.

Personally, I put deductibles in a special savings account. That easy I can access the deductible without financial strain or stress.

You might also investigate a personal umbrella or liability policy. I've got one that covers gaps. It's very reasonable for the peace of mind it provides us.

 

[adjusterjack]

I can't tell what the HOA will cover and what I am responsible for.

Here's what you need to know. The HOA doesn't cover anything that YOU own or may become liable for. The HOA covers what the HOA owns and it's own liability.

To find out what you own, look in the condo documents for the definition of "unit."

When you buy a condo unitowners policy (also known as HO-6) here's what you need to cover:

1 - Your property.

Your property includes your personal property: furniture, electronics, free standing appliances, clothing, linens, food, household goods, supplies, tools, guns, cameras, computers, TVs, jewelry (limited), etc. Total up the cost to replace everything you own if it all gets destroyed by a fire that's how much coverage for personal property you should have.

Your property also includes the "unit" that you own, as defined by the condo documents. Typically that means your cabinets, sinks, toilets, built-in dishwasher, built-in oven, ceiling lights, ceiling fans, the carpet and/or flooring, the paint on your walls, and, in many cases, the drywall under the paint and, in some cases the wall studs behind the drywall. It includes all the electrical wiring that serves your unit, all the plumbing that serves your unit, and the AC/heat that serves your unit.

You OWN all of that and nobody else will cover it if you don't. Total up what you think it would cost to replace all of those "unit" items if your home was gutted by fire. Then take that amount and double it because your uneducated estimate is going to be half of what it takes to rebuild.

Ask your agent for a sample of the condo policy. You will find sections for Building and for Personal Property. You should buy coverage for both.

Deductible - Buy the lowest possible deductible that's available. $250 or $500 but not more. These condo policies don't cost much and the premium savings for a high deductible is negligible.

2 - Liability

Takes care of you if somebody claims that your negligence caused them injury or property damage. Provides an attorney if you get sued. Take the amount of money that you paid for your condo, triple it and you'll have the amount of liability insurance you need. If you don't want to figure it that way buy at least 100,000/300,000 Bodily Injury and 50,000 Property Damage, or a 300,000 combined single limit. Your agent will know what that means.

Take to heart what I'm telling you. I spent 35 years in the insurance business and I know what misery can befall somebody who doesn't buy the proper insurance.

Don't be penny wise and dollar foolish.