Understand Your HOA Master Policy Before Looking for Condominium Insurance Quotes

A September 2009 article in Real Estate Economy Watch claims the glut of condos on the market may be an end as lower prices, low interest rates, first-time buyer tax credit and available financing attract bargain hunters and eliminate standing inventories. If you’re thinking about snapping up a good deal before the inventory dries up, be sure you understand how condominium insurance quotes differ from single-family homeowners insurance.

Do not assume that something is covered by your homeowner association fees.  Read your HOA master policy to understand specifically what parts of your condominium complex are covered and what parts aren’t. Typically, your HOA’s condominium insurance takes care of common areas like the roof, basement, walkways, elevators, hallways and any heating/air conditioning system serving the entire complex. The actual requirements will vary according to state law, but in any event, get a detailed list spelling out exactly what they consider to be a common area. Be aware that the HOA condominium coverage may not extend to damages that began in a common area but extended into your private space. If a gap exists in the coverage, you need to fill it with your own personal condominium policy.

Your HOA board may elect to also insure your condominium complex for sewer backups, flood and earthquake. If it doesn’t, you should consider adding those riders when looking for personal condominium insurance policy quotes.

You should also find out what the master policy’s association deductible is, because typically, when your HOA files a claim, they’re going to assess all the owners for the deductible. If your HOA has a high deductible, you could end up getting socked with an assessment you weren’t anticipating.

Once you know what the HOA master policy does and doesn’t cover and have identified gaps, start thinking in terms of the value of the contents of your condominium. What would it cost to replace your furniture, artwork, clothing, collectibles, jewelry and so forth? Then figure out which structural parts of your unit are your responsibility should they be damaged. The basic rule of thumb: the less the HOA master policy covers, the more personal condominium insurance coverage you’re going to need.

Finally, if you are renting your condominium unit, remind your tenants that they need their own renters’ insurance to cover loss or damage to their personal possessions.