Do I Need Homeowners Insurance If I Purchase a Condo?

Buying a condo is a convenient way for busy people to own their own place. Condominiums sometimes have amenities such as pools and recreation rooms. They also come with maintenance people to do all of the yard work. These are not free services though, because condos also have a Home Owners Association (HOA) fee. While condos have real estate taxes that each individual pays, how the individual condo is insured can become confusing.

The HOA Insures Part of the Condo

The Home Owners Association is a board of members that basically set the rules of the condo and that take care of maintenance issues in common areas of the condo building. When a person purchases a condo they will pay a monthly HOA fee. The amount of the fee will vary, depending on the area and how many units are in the building.

The HOA has an insurable interest in each condo unit. Most of the time the insurance that the HMO fee covers is only for the building and common areas of the condo. If the building is damaged in a fire or wind storm, for example, the HOA insurance would cover that. If there is a common laundry area that is vandalized or damaged, the HOA insurance would cover that as well.

Damage Inside the Individual Condos

Anyone that buys a condo should read the HOA agreements carefully so that they understand what insurance liability they will suffer in the event of damage to the inside of their condo. Some condo companies may cover things inside the home, while some may not.

If you purchase a condo, you need to have your own insurance policy to cover the loss of personal property such as clothing and furniture. You may also need to insure things like appliances and water heaters. What exactly is insured through the HOA agreement varies greatly, so you'll want to be sure to know all of this, before you need it.

When you are looking to purchase a condominium, be sure to ask the real estate agent how much the HMO fees are and what exactly those fees cover. If the condominium's HMO fees are extremely expensive and you still have to purchase adequate insurance coverage on your personal belongings and appliances, you need to take all of that into consideration.

If a water pipe breaks and your carpet is ruined, does the HMO insurance cover this, or will you need your own insurance policy to take care of it? Make sure you understand what is covered and what will come out of your pocket in the event of a disaster.

Source

Own a Condo.com

Condo Association.com