Condominium Insurance, also, known as HO-6, can once again be tricky but for distinct reasons. The building has a Home Owners Association (HOA) made up of all the unit owners. The HOA is owned by the unit owners and they have a master insurance policy for what are known as “common elements”. These are the exterior walls, roof, surrounding areas, parking or landscaped, swimming pool, tennis courts, clubhouse, etc. The trickiness is in how they determine where their coverage stops and yours starts.
“Condominium…from the Latin word condorium”…meaning to overcharge for no reason!” – Robin Williams
“Walls in coverage” was the norm in the past, but not now as much. What that means to you is that anything attached to the walls inside your unit…from the sheetrock in…to the kitchen cabinets, to the fixtures in the bathroom, and the light fixtures on the ceiling…and of course, including the flooring is considered to be a part of the master HOA policy and is covered. In the event of a major event such as a fire, tornado, lightning strike to the building, the master policy covers those damages.
But…(there’s always a but…) what happens if you do something boneheaded like I did years ago, & started a grease fire in my kitchenYes, I did that! Is that covered under the master policyNO! I’m on the hook for that.
The typical condominium owners’ policy looks just like a renters’ policy. Most of the time, coverage for your personal property, and liability. As a rule, I will add Coverage A DWELLING coverage to these policies normally in the amount of 25% of the purchase price. A $400,000 Gulch condominium will have $100,000 of coverage to insure themselves in the event of my grease fire, or maybe a unit owner upstairs that floods your unit. For what it covers, the price is normally very inexpensive.
Mortgage lenders are requiring this for their borrowers increasingly. Did you know that for one building in the Gulch, the unit owners are responsible for the exterior glass panels in their unit? Truth!