You’ve locked down the sweet new digs—now it’s time to insure them! We all know that condo associations, co-op boards, and mortgage lenders have their best interest in mind—so expect that each will require proof of insurance before approving the purchase.You’ve locked down the sweet new digs—now it’s time to insure them! We all know that condo associations, co-op boards, and mortgage lenders have their best interest in mind—so expect that each will require proof of insurance before approving the purchase.
Condos and co-ops have insurance policies for their buildings. This is the “master policy.” This policy insures the common areas and amenities like the elevator, roof, basement, walkways, and boiler. Damages and liability are covered through this policy. You will want to know exactly what the master policy covers. Armed with a copy of the building’s bylaws, home in on what’s covered. Knowing exactly what’s covered will help you focus your other policy. The second policy should be the one you take out to cover your individual unit. You may want to set up an appointment with an insurance agent and bring those bylaws along so you have help determining which coverage you need for peace of mind and to satisfy your building’s requirements. This will also help you get the best price.
Check those trusty bylaws to see if your building requires liability insurance and how much. This kind of insurance covers damage that you cause to another unit and injuries sustained within your apartment. Think: an overflowing toilet that waterfalls into the apartment below or the dog walker tripping over Fido’s bone and twisting their ankle. Your building may not require liability insurance, but those two examples alone prove how valuable that kind of coverage can be. And if you were living in the apartment below and had water flowing into your living room—wouldn’t you wish your neighbor had liability insurance?
This insurance is additional coverage for the building and its common areas. Wait! Hear us out! Let’s say that a terrible storm damages the outside of the building (aren’t we still recovering from Sandy?!). The condo or co-op’s policy has a property damage limit of $500,000, but the cost to repair the damage is $650,000 when all is said and done. That extra $150,000 is going to be divided among owners or shareholders. Do you want to be on the hook for your chunk of change? Loss assessment insurance can fill in this gap.
Speaking of Hurricane Sandy… Find out if you live in an area prone to flooding and get flood insurance. You will sleep better at night. Homeowners insurance does not cover flooding. Rough, we know. You can visit the Flood Help NY website to see a flood map of the area and explore other resources regarding flood preparedness. It’s an awesome resource! https://www.floodhelpny.org/en
Insurance may seem complicated, but it protects you, your assets, and visitors. Plus, as long as your minimum insurance requirements are met, you can change your levels of coverage. So do keep an eye on your coverage and feel free to reassess as time goes on.