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I'm in the process of buying a condo and in my financial documents it says I will need hazard insurance. I didn't think I would be needing this, so I asked the mortgage broker and he said I'd have to find out what the condo's master insurance covers. I called their insurance agency and they said it covered "some walls in", but that I'd have to call the condo's management agency to find out for sure. I'm waiting for a call back from them - ?
One of the first brokers I was working with (my agent's "mortgage guy") had a line for $1300 for hazard insurance on the GFE he sent me, I asked him why I needed it and he said - "oh, that was a mistake" and took it off the GFE.
Sure thing. With that being said, make sure that you read the condo docs so you know what you are joining into.
Also, $1300 is a lot for hazard insurance on a condo. Maybe the first person wasn't paying attention to your file and assumed that you were purchasing a single family home.
thanks - I've read over the association rules, budget, the finance people are also checking the budget and the management.
I know that condos are restricting in a lot of ways, but for me, I tend to be one who doesn't mind rules and guidelines on things like pets, decorations, parking, noise, what you can/cannot put on your balcony etc. etc.
If your condo is in a hurricane area, hazard insurance is priceless; when the glass breaks, the whole place is flattened, the roof comes off and your place is drenched, etc. Or if you are in an earthquake zone, you need extra insurance for that.
is hazard insurance typically part of the HOA master insurance? I realize it varies from association to association, but wondered if it is typically covered.
is hazard insurance something one pays each year just like car or renters insurance?
Many condos only cover exterior hazard insurance. If a pipe in your condo breaks and floods your condo, ruins the carpet and baseboards, etc. it's usually your insurance that pays and not the condo insurance. Which is why lenders require you to have it for the interior. But since it's only partial coverage, it's cheaper than a house. $1,300 does sound like way too much but it's best to understand what coverage you need an get a quote. Then you know for sure.
Ask the association's insurance agency for the association's certificate of insurance. It should minimally include, property liability/umbrella, D&O, commercial auto, including hired and non-owned auto and fidelity. If the association has direct employees Workers Comp and Employment Practices, including harassment and sexual molestation are necessary. Flood and/or earthquake insurance are also common, dependent on location.
Association insurance is designed to protect the association ( collective owners) from external exposures. Condo owners usually need their own insurance to transfer the potential exposures associated with their unit and stuff within the unit.
Condo owners also need to consider liability insurance for claims related to potential accidents within their own unit.
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