Homeowners Insurance (cont)
October 18, 2007
Yesterday, I wrote about the standard single family home insurance policy. A question that arose had to do with the need for a homeowners policy when you purchase a condominium. Yes, an insurance policy is needed, but it will provide different coverage than is provided for a stand alone residence.
When you purchase a unit in a condominium project, you are purchasing "air space". The Homeowners' Association owns the building and the common area and will have a master insurance policy covering these structures. This policy provides liability coverage and for structural loss from fire, wind, water damage (not flooding) and other coverages. When you purchase a condominium unit, you should be sure to review the Association's coverage.
The condominium owner's insurance policy that you need to purchase will protect you against negligence liability in case someone is injured in your condo unit. The policy will also provide coverage for fire or other damage to your furnishings, theft, accidents and damage to the interior of your condominium.
There is often a misuse of the term "condominium". Many residences that have a homeowners' association are not condos, but rather PUDS or PRDS. A PUD is a planned unit development and PRD is a planned residential development. A review of the homeowner documents should clarify what type of unit you are purchasing. Usually in PUDs or PRDS you will own the entire residential unit including roof and walls as well as a part ownership in any common amenities such as green belt, pool, club house, etc. The homeowners' association will have a master policy covering the common areas, but you will need to obtain a standard homeowners policy covering your entire unit.
Insurance is for when disasters or accidents occur. You may never need to use your coverage, but it is vital that it is in place.
Yesterday, I wrote about the standard single family home insurance policy. A question that arose had to do with the need for a homeowners policy when you purchase a condominium. Yes, an insurance policy is needed, but it will provide different coverage than is provided for a stand alone residence.
When you purchase a unit in a condominium project, you are purchasing "air space". The Homeowners' Association owns the building and the common area and will have a master insurance policy covering these structures. This policy provides liability coverage and for structural loss from fire, wind, water damage (not flooding) and other coverages. When you purchase a condominium unit, you should be sure to review the Association's coverage.
The condominium owner's insurance policy that you need to purchase will protect you against negligence liability in case someone is injured in your condo unit. The policy will also provide coverage for fire or other damage to your furnishings, theft, accidents and damage to the interior of your condominium.
There is often a misuse of the term "condominium". Many residences that have a homeowners' association are not condos, but rather PUDS or PRDS. A PUD is a planned unit development and PRD is a planned residential development. A review of the homeowner documents should clarify what type of unit you are purchasing. Usually in PUDs or PRDS you will own the entire residential unit including roof and walls as well as a part ownership in any common amenities such as green belt, pool, club house, etc. The homeowners' association will have a master policy covering the common areas, but you will need to obtain a standard homeowners policy covering your entire unit.
Insurance is for when disasters or accidents occur. You may never need to use your coverage, but it is vital that it is in place.
posted by shirley harry at 8:33 AM
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