Buyers are typically confused as to what the Homeowners Association Policy will cover and what their interior Condominium Owners (AKA HO6 or Walls In) policy should cover. A lot of people assume that the association has insurance, so why do they need to carrier it also?
Does the association policy cover personal belongings?
The association policy does not cover your personal belongings nor your liability inside the unit. Unfortunately, there is NO STANDARD for condos. Every Homeowners Association structures their policy differently and it is all mandated by the Covenants, Conditions and Restrictions (CC&Rs). In certain cases, the requirements are clearly written. Other times, the requirements are vague and up for interpretation (which can be very dangerous).
In the process of insuring a condo there are 2 important steps:
Review the CC&R’s.
Contact the agent that insures the Homeowners Association master policy and ask them what the master policy covers.
In a recent review of a CC&R document, it appeared that the association covered everything inside except upgrades. Upon further review there was one tricky little word: may. The document stated the association may cover… That one little word was a game changer. The insurance company who handles the master policy for the HOA was contacted and immediately advised; “No, our policy covers nothing from the walls in, just the structure. Everything inside is the owners responsibility.”
Had this not been reviewed, and the homeowner assumed they had coverage, they would have had to rebuild the interior out of pocket in the event of a claim.
It is very important that you as the owner of the condo review these documents thoroughly when you purchase the home. If you’re unclear on what the association does or does not cover, you should contact a insurance professional for advice.
To review your Condominium Insurance policy:
Contact our Carlsbad Insurance office at 760-795-2002, or our Temecula Insurance office at 951-296-6833.
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DIY Upgrades that Entice Buyers
Why You Need a Personal Umbrella Policy