Eye Opening Situation. Do most homeonwer's have condo riders or condo insurance??

Many first time homeowners may not be aware of the responsibility that they have to themselves and others in the form of homeowner's insurance. I know I didn't have coverage when I first bought a condo as I thought I was covered through the HOA. ( I quickly learned that is not correct and exactly what could happen without coverage... a leak, mold etc. not happened to me, but another unit. )

Recently we had a pretty severe issue with a leak in an upper floor. It was taken care of but there is residual damange when needs to be sorted out by the two units involved. It has come to our boards attention that neither of these two units have any condo insurance, condo riders or homeowner's insurance of any kind. It's definately a leak that was caused by improper installation of a appliance on an upper unit.

How often does it come to be known that owner's don't carry homeowner's insurance? There is some damage to communal property on the outside of the building which the HOA will take care of and bill... Has something like this happened before where no insurance is in place when a homeowner is at fault? It will no doubt need to be sorted out in small claims or the sort. Just curious how common is the uninsured??

... and if there is no mortgage?

Many HOAs, especially those with common walls and joined structure parts require proof of insurance. As a matter of fact, more than most require it. I own a Florida villa and they allow us 30 days after the renewal date to provide documentation of having coverage and THEY have set the minimum amount to be covered. And yes, lenders will require it and most likely add it to the monthly mortgage payment.

Sheilah,

Here again, it may be up to the HOA to mandate that all units have coverage to their individual units. Renters insurance won't cover damage to the structure unless there is a liability statement stating so. How to enforce this is another question but in a common walled structure, it is nescessary to make sure that there is adequit coverage from all that share the building.

There is a clear distinction between HOA's with shared structures (condos, townhomes, etc) and those with single-family homes. In threads such as this, always indicate when referring to your HOA, into which category it falls.

I don't know if my HOA requires insurance; but it's not relevant, because we don't share walls -- only grassy common areas. I'm not even sure about the difference between a townhome and a condominium, or what kind of "villas" share walls.

Donna,

Thanks, but I'm not sure how this is responsive to my post. But my post was not really in response to your previous one, and I'm not sure why I quoted it.

Well, our HOA does not require individual units to have thier own insurance. Over all it's a very inexpensive plan. Basic coverage runs about $20 a month. We do have basic building coverage that our HOA has.. and that is often all the mortgage companies need...

I think with the redo of our cc&r's it may be a good time to think about adding a mandated insurance clause.... will submit an idea to the HOA and see where it goes.

The mortgage company for the unit-owner only cares if there is a Master policy in place, but folks are nuts if they don't carry a unit-owners Condo Policy. They are typically very cheap $100-200 and they cover the unit owner's property, liability and Betterments/Additions and alternations which is basically were the Master policy leaves off.

Because we had so many rental condos, our Board implemented a rules that says that the unit-owner provide a copy of the renter's insurance policy along with a copy of the lease. In the case of a Rental Condo, the unit owner should still carry a policy in addition to the renter's policy. If the renter causes a water loss or fire, at least the COA might have some recourse so that they could subrogate for damages. Also, some of our absentee owners are negligent sometimes with maintenance issues and cause losses for which the Board might subrogate against the unit owner for damages to the dwelling.

Michael,

The mortgage lenders who do not require insurance on these properties are the same companies who fell flat on their big corporate butts because of poor lending practices. To sell mortgages, they skipped requiring insurance coverage in order to keep the monthly payments down. Not only did this practice not cover the mortagee, it failed to cover joint ownership of common walls and property.

I sold 2 condos when we relocated to Tennessee and both required full coverage on any unit before the titles were transfered. So this might fall into a HOA responsibility to require coverage at least to common structure

Jeannie,

Yes, all of these different types of structures are called by different names. We have argued that until the cows came home. The defining factor is whether or not there is any common wall or walls of the structures, in other words, are the joined in some place. That is where an association could OR should require insurance to cover that area where an event could cause damage to the ajoining wall or members unit.

Mary,

Please explain when you say that this has nothing to do with insurance coverage? That is the question asked by the O.P. We are not addressing "common area" but common structure. Having your individual space insured and all that your space abuts up to is what is what we need to have insured but some governing documents do not address this, therfore owners don't seem to find the need, thus the HOA needs to have written policy requiring insurance coverage for common structural elements.

Hah! That's why it is so difficult to truely understand a posters "intent". If that was Mary's intention, I thank you Michelle for clarifying that.

Well, I seem to be wrong a lot lately but if you all have the same OP on this thread that I have the question was about a condominium and the advisability and practice of each owner carrying an additional policy on his/her unit.

There is something very wrong if ANY Condo does not carry a blanket insurance policy on the common property of the association. The individual insurance I think of question is termed by at least those in SC as HO6 Insurance and is loosely referred as contents insurance although there are stipulations that expand on that singular coverage. It is really no different except the physical structure and proximity to other dwellings, than buying contents insurance for a single family home. The proof is in the pudding and that is determined by how the Umbrella insurance for the common property is written. Of course common property should absolutely be included in the covenants, and ours does. It is recommended that HO6 Insurance be carried by each individual unit. I have carried this kind of insurance forever it seems, never made or been involved in a claim, which is beside the point. I suppose only two things can happen. There involvement with the common property requiring insurance adjustment. There can be a problem inside the unit involving something covered by the HO6. That can happen singularly or in any combination. Someone steals grandmas silver and you have HO6 insurance for it..........owner takes care of it. A roof blows off and results in no collateral damage. Regime is covered under Blanket Common property insurance. Unit A hot water heater give way and soaks unit B under unit A. No other collateral damage, and both have HO6 insurance. Insurance companies get together and in this case probably upstairs units insurance pays, is covered in policy.

Unit A, same circumstances, damage this time includes damage to common property in addition. Three insurance companies then decide who pays what according to coverage of each.

If you don't carry HO6 you are at a distinct disadvantage and who knows what you are going to have to pay.

In addition to H06 you can carry extended coverage on a insurance policy to cover specific item, one may be living expenses if you have to move out. In any event that coverage can not in any subvert the Common Property insurance carried by the Regime. The sections that deal with common property insurance is in our covenants.

It seems reasonable that the Board would have the authority to require H0^ insurance on all units because that would be protecting the whole.

My opinion

Tracie,

My CC&Rs that have the insurance statements is 7 legal sized pages long. It includes A. Public Liability Insurance, B. Hazard Insurance,Flood Insurance, Form of POlicy and Insurance Trustee, Required Policy Provisions, Restrictions of Mortgagees, Distribution of Insurance Proceeds and Losses, Fidelity Coverage, Cancellation or Modification, Condemnation and Additional Insurance.

The final paragraph states " IF ANY OWNER SHALL FAIL TO OBTAIN SUCH INSURANCE AS REQUIRED OR SHALL FAIL TO SUPPLY TO THE ASSOCIATION ANY CERTIFICATE OF INSURANCE AS HEREINBEFORE SET FORTH, THE ASSOCIATION SHALL HAVE THE RIGHT TO OBTAIN SUCH INSURANCE AND LEVY A SPECIAL ASSESSMENT AGAINST THE OWNER IN QUESTION AND HIS DWELLING UNIT THEREFORE"

If you send me your e-mail, I can scan this all for you. It is very complete for association coverage. [email protected]

Whether or not the COA board can mandate that the owner have converage, that's one good question, but the biggest reason that it should be required is due to fact that if a unit owner caauses a major fire or water loss, the Insurance Carriar for the Master Policy can subrogate against the unit owner's policy. Your rates are often based on Loss Experience (Prior Claims paid). We had a unit owner that left her dryer running in the am when she left for work. A lint fire pretty much damaged her unit and two others. At least we could recover up to $300,000 under the unit owner policy due to her negligence. We've also seen similar scenarios where the unit owner or renter caused major water losses by accidental overflows from Tubs, sinks etc.

Mike,
Thanks for the reply.

Lets take my posted scenario about a condo Unit A leaks on Unit B below and lets say there is no collateral damage.

#2, same as above only this time there is common property damage.

If the below definition can be applied, who does all this wheeling and dealing and do you think an Insurance Committee should be involved in the discussion or actions?

Let me say I am trying to gain some knowledge here>

DEFINITION OF SUBROGATION
An insurance carrier may reserve the "right of subrogation" in the event of a loss. This means that the company may choose to take action to recover the amount of a claim paid to a covered insured if the loss was caused by a third party. After expenses, the amount recovered must be divided proportionately with the insured to cover any deductible for which the insured was responsible.

Tracie,

The insurance copy that I have is in my 55+ community of 2 side by side, joined units. ( They are called villas in the documents) Call them what you will.