This commonly scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. Please submit your inquiries to him by way of electronic mail for response in future columns. Video summaries of some articles might be discovered on YouTube on the Ask Eli, Stay With Jean playlist. Take pleasure in!
Query: What’s the distinction between my particular person condominium insurance coverage and the Affiliation’s grasp insurance coverage coverage and do I want my very own insurance coverage?
Reply: Each condominium affiliation has its personal (costly) Grasp Insurance coverage coverage to cowl the frequent components and restricted frequent components, however there are substantial gaps between the affiliation’s coverage and what you’re personally accountable for with out a person HO-6 coverage. Most individuals store for the most cost effective, quickest particular person insurance coverage coverage and apply simply sufficient protection to fulfill the lender’s necessities, however that will put you at monetary danger.
To elucidate frequent gaps between grasp insurance policies and HO-6 (particular person condominium) insurance policies, I’d wish to re-introduce Andrew Schlaffer, Proprietor and President of ACO Insurance coverage Group. Andrew is an skilled in Grasp Insurance coverage insurance policies and has helped a number of native condominium affiliation’s scale back their price and enhance their protection since writing a column on the subject final 12 months. In case you’d wish to contact Andrew on to assessment your affiliation’s grasp coverage, you may attain him at (703) 595-9760 or [email protected].
Take it away Andrew…
Grasp Insurance coverage vs Particular person Insurance coverage Coverage
Almost all grasp insurance coverage insurance policies on this space are written on a Single Entity foundation which implies protection extends to common and restricted frequent components but additionally extends inside particular person models to fixtures, home equipment, partitions, ground coverings and cabinetry, however just for like sort and high quality to that conveyed by the developer to the unique proprietor.
Gadgets not lined by the grasp insurance coverage coverage and are usually not the affiliation’s duty embrace:
- Private Property (garments, electronics, furnishings, cash, paintings, jewellery)
- Betterments and Enhancements (demonstrable upgrades accomplished after the preliminary conveyance)
- Further Dwelling Bills (the fee to dwell at a short lived location, storage charges, lack of rents)
- Private Legal responsibility (gives safety for bodily damage or property injury claims arising out of your unit)
- Loss Evaluation (triggered provided that there’s a lined reason for loss and the grasp insurance coverage coverage limits are exhausted; this evaluation would apply collectively to all unit homeowners)
- Medical Funds (no fault protection obtainable for injured visitors inside your unit)
Rental homeowners should buy a person condominium insurance coverage coverage (HO-6), which can be required by lenders. This coverage can present protection for the gadgets listed above.
Overview Your Dwelling Protection
Dwelling Protection ought to be included in each HO-6 coverage to keep away from important out-of-pocket bills. Many condominium associations can maintain you liable for bills that fall underneath the grasp coverage deductible which can be attributable to the proprietor’s act, neglect, misuse or carelessness. Because of the rise in water injury losses, many insurance coverage carriers are rising their deductibles, which in flip spurs the necessity for owners to regulate their dwelling insurance coverage restrict.
In a latest occasion, a condominium affected by important water injury losses was required by its insurance coverage service to extend the grasp insurance coverage coverage deductible from $10,000 to $25,000. On this neighborhood, every home-owner ought to have a minimum of $25,000 of dwelling protection to indemnify them for the deductible expense within the occasion a declare arises from their unit. If protection just isn’t obtainable, the home-owner would both pay this expense personally or the affiliation can put a lien on their unit.
Dwelling protection also needs to embrace a home-owner’s betterments and enhancements (enhancements made above what the builder initially delivered), together with these accomplished by prior homeowners. Most lenders would require a minimum of 20% of the unit’s market worth insured underneath this protection as nicely.
What Data to Share with Your Insurance coverage Supplier
You need to all the time assessment the condominium affiliation’s governing paperwork and perceive the relevant statutory necessities (i.e. Virginia Condominium Act) and lender necessities to confirm their particular person tasks, together with upkeep/restore and insurance coverage. Together with sharing the affiliation paperwork, owners also needs to present their private insurance coverage agent with the next:
- What’s the grasp coverage deductible? ($5,000, $10,000, $25,000)
- What method is used for the condominium insurance coverage protection? (Single Entity)
My Advice for HO-6/Different Particular person Insurance policies
Thanks, Andrew, hopefully this helps a minimum of a handful of readers higher shield themselves.
I discover that almost all consumers go straight for the trail of least resistance and most cost-effective premiums for his or her insurance coverage protection. Including protection to your current auto coverage in 5-10 minutes most likely implies that no person reviewed your affiliation’s Grasp Insurance coverage coverage and thus you’re prone to protection gaps. Personally, I’d fairly pay a bit extra to know that my insurance policies have been designed with some private consideration and reviewed yearly for gaps. Andrew and his staff can deal with this for you as nicely.
In case you’d like to debate shopping for, promoting, investing, or renting, don’t hesitate to achieve out to me at [email protected].
In case you’d like a query answered in my weekly column or to debate shopping for, promoting, renting, or investing, please ship an electronic mail to [email protected]. To learn any of my older posts, go to the weblog part of my web site at EliResidential.com. Name me instantly at (703) 539-2529.
Video summaries of some articles might be discovered on YouTube on the Ask Eli, Stay With Jean playlist.
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Actual Property, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460
