Expect the unexpected! Do you really think the owners on the 39th and 40th floors of the Belaire condominium building in New York City could have ever imagined a small plane flown by a Yankees pitcher would crash into their complex? The tragedy for the two in the plane that were killed is undeniable, but it helps emphasize the need to make sure you have the proper condo insurance.
Many of us are familiar with Homeowner’s Association (HOA) dues, but what exactly do they cover? Generally speaking, only the exterior of the unit (roofing and walls) as well as the common areas fall under the HOA’s responsibility. Thus, you most likely are held accountable for the interior structural items such as flooring, cabinets, and fixtures, as well as all your personal belongings. One way of thinking about it is to compare your condo to a dollhouse (don’t do this with your child’s latest holiday gift) and turn it upside down; essentially whatever falls out are items you’d be responsible for.
So what to do about this? Well, make sure you read the HOA’s CC&R’s (covenants, conditions, and restrictions) so you know exactly what they cover. As far as making sure you cover your ass(ets), take an inventory (use a flip video) of your personal belongings and store an extra copy in a location other than your home. With flip videos, the information can be stored online for easy access anywhere.
What if you are not an owner of the condo, but are renting? Yes, the property itself is not yours, but you’ll still want to protect yourself through insurance. When it comes to renters insurance, you will most likely come across three components of coverage: 1) personal liability coverage to protect against lawsuits due to property damage or bodily injury to others…yes, we live in a litigious society 2) personal belongings (in case of theft, vandalism, fire, water damage) 3) living expenses in the event that you are temporarily displaced (happened to me in 2007 with the San Diego fires). Just like owners, I’d strongly encourage you to videotape your belongings as well.
I realize that many people hate to pay those insurance premiums (there’s a reason some of the tallest buildings in the Big Apple are insurance companies), but you really need to make sure to cover your ass(ets). Not once in my lifetime have I ever heard someone say they had too much insurance. On the contrary, think about all the times people wish they would have at more coverage. Consider this your fair warning!
While I am in the business of buying and selling property, the transaction does not stop at the close of esc row. If one helps a client either buy or sell what is often their single largest asset, it only makes sense to insure (no pun intended) that they protect that asset.
