Condo and Townhome Coverage – Are you covered?

November 16, 2015 Katy Hunter

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Do you have the right coverage in place

For Your Condo or Townhome?

There is quite a bit of confusion regarding the Condo/Townhome policy (also called an HO6 form). Some owners do not believe they need additional insurance since they are paying their HOA fees. Some have too little coverage and some may have too much. What are the things you need to be mindful of when insurance your Condo or Townhome? Townhome Picture What does my HOA really cover? Make sure you have a copy of the most updated Master Policy. Here are a few things to consider. However always consult with your agent regarding your coverage.

Do I need to cover the structure? If so…how much?
Who covers the HOA deductible?
What does personal property cover?
What is Loss of Use?
What is Loss Assessment?
Why do I need Liability Coverage?

Coverage A: Building Property: This covers damage to the building/structure that you are responsible for in the event of a covered loss. Your HOA Master Policy should detail what they cover and what you need to insure. This may include cabinets, millwork, doors, countertops, ceilings fans etc. as well as any improvements or betterments you have made to the home. What you need to know is what does my HOA policy cover first? You then cover the rest. In addition to this, you may be responsible for paying the HOA policy deductible before any repairs are made. If so, include that here as well.

Coverage B: Personal Property: This coverage is for all your personal belongings. Include things such as clothing, shoes, bedding, furniture, dishes, small appliances, electronics, etc. There are some limits on home computers, jewelry, and precious metals. Ask your agent for details. Think of this as all the things you would take with you if you moved to another location. Add this up and you have your personal property coverage.

Coverage C: Loss of Use This coverage is often overlooked until you really need it. If you are unable to use your home due to a covered loss, this coverage will pay for your temporary housing and any extraneous expenses you may incur due to the loss of use of your home. Check with your agent for details on this coverage. It may be stated as a set dollar amount or as a time frame.

Coverage D: Loss Assessment: If the HOA suffers a major loss (Severe building damage, common area lawsuit, etc.) and the HOA policy cannot cover the full amount of the loss, the HOA may reserve the right to assess a portion of that loss to the unit owners. The maximum amount per unit owner is stated in the Master Policy. This coverage should match that amount. Your agent can work with the HOA policy agent to make sure this is in alignment. Otherwise, this may be money out of your pocket.

Coverage L: Personal Liability: This coverage protects you in the event someone brings a lawsuit against you for property damage and/or bodily injury and you are found legally responsible for in a court of law. This amount should be high enough to cover your assets. Lawsuits are becoming more prevalent every day. Talk with your agent about protecting your assets today.

To summarize, there are 3 things you want to make sure you have or want to consider when you talk with your agent about insuring your Condo or Townhome