Homeowners Policy for Condo & Agent Responsibility

joshi

New Member
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Hi, we recently purchased a 10 year old, free-standing condo for about $350K and were working with an independent agent on a policy. I'm confused about how much to cover for the "dwelling" portion. I had trouble understanding the condo assn's policy, but their insurance agent said that the homeowner is only responsible for improvements. If the place burns down they will restore it to the base spec that was originally built. They said it'd be with the same builder. I sent the condo policy to my independent agent, asking to help us determine what amount to cover, and she basically said it was our problem to figure that out. She said to ask the condo policy company what they think we should cover and she said that she has never reviewed a condo assn policy. Some questions:

1. Is it typical that an independent agent would not review the condo assn's insurance policy and help us get to an answer?

2. Does anyone have recommendations on what to carry for a dwelling policy? We have put in around $30K in improvements; we are unsure exactly what the original owners did. Currently we are covering $300K for dwelling and I'm thinking that may be too high and perhaps it should be lowered to $100K or less. I guess I am still a little mistrustful that if the house burns down they are really going to rebuild the condo using the same specs as the original. (This is the first condo we've ever owned).
 
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I spent the last 9 years of my career as a property claims adjuster and I handled hundreds, maybe thousands of condo claims, so I can help you with this. I am apparently a "super genius." LOL.

Hi, we recently purchased a 10 year old, free-standing condo for about $350K

First thing I need you to do is explain what a "free-standing condo" is. "Condo" typically implies sharing structural elements with other condos. A "free-standing" dwelling implies that you own a separate house where you don't share any structural elements with any other houses.

Let's get that out of the way and I can help you with the rest.

Note that you can upload a photo. See Manage Attachments - below. Post a photo of your condo so I can see what we are dealing with.

Also tell me your city and state.
 
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I spent the last 9 years of my career as a property claims adjuster and I handled hundreds, maybe thousands of condo claims, so I can help you with this. I am apparently a "super genius." LOL.

First thing I need you to do is explain what a "free-standing condo" is. "Condo" typically implies sharing structural elements with other condos. A "free-standing" dwelling implies that you own a separate house where you don't share any structural elements with any other houses.

I've heard them also called patio homes in our area, and some may call them a detached condo. It's considered a condo, but we do not share any structural elements with our neighbors. They look like separate homes. The association mows the lawns, handles the landscaping, paints the homes, and would replace the roof. Hope that makes sense. Columbus, OH.
 
I know agents who are experts on condos, either or both individual units or association master policies. Even they are very wary of suggesting insurable values. Condo laws in your state likely govern what you own and are responsible for. Florida has some of the clearest laws in the country but other states have laws that are difficult to understand and apply.

I don't happen to know any agents in Ohio who I'm aware have great expertise. As AdjusterJack asks, is this really a "condo" property or a fee-simple home with an HOA and perhaps community property?
 
I know agents who are experts on condos, either or both individual units or association master policies. Even they are very wary of suggesting insurable values. Condo laws in your state likely govern what you own and are responsible for. Florida has some of the clearest laws in the country but other states have laws that are difficult to understand and apply.

I don't happen to know any agents in Ohio who I'm aware have great expertise. As AdjusterJack asks, is this really a "condo" property or a fee-simple home with an HOA and perhaps community property?

It is a condo property.
 
It is a condo property.

You wrote that already.

Did this not register with you:

First thing I need you to do is explain what a "free-standing condo" is. "Condo" typically implies sharing structural elements with other condos. A "free-standing" dwelling implies that you own a separate house where you don't share any structural elements with any other houses.

The point being, is your home a free standing structure? A house unto itself? With 4 walls, a floor, and roof that you don't share with anybody else?

Like this:

https://static.pexels.com/photos/106399/pexels-photo-106399.jpeg

Or is it a "condo" where you have neighbors to your right or left with whom you share walls, or a neighbor below whose ceiling is your floor, or a neighbor above whose floor is your ceiling?

Like this:

https://media.brstatic.com/2017/03/31182454/three-story-building-condos-on-field_573x300.jpg
 
Very short answer. Condo policies come in 2 flavors. Walls in and walls out. You have a walls in policy (from what you described) which means it pays to put the kitchen cabinets back in, flooring, light fixtures, etc. Basically, as purchased new if no upgrades were ordered.

This is why it gets complicated. Without reviewing the original sales data (which nobody has) its hard to know the cost of the upgrades, much less the upgrades done over time.

If in doubt, add $50K in extra dwelling coverage. Its amazingly inexpensive.

If you have a walls out policy, then it only covers the 2x4's out, you have to do the kitchen, bathrooms, flooring, etc. You need more coverage in this situation.

Condo - everyone has their own definition of what a condo is. That part gets confusing depending on who you are talking to. Unfortunately, where there are a few freestanding single family homes within a Condo association they are frequently covered differently on the master policy and sometimes require different coverages.
 
You wrote that already.

Did this not register with you:

The point being, is your home a free standing structure? A house unto itself? With 4 walls, a floor, and roof that you don't share with anybody else?

Like this:


Or is it a "condo" where you have neighbors to your right or left with whom you share walls, or a neighbor below whose ceiling is your floor, or a neighbor above whose floor is your ceiling?

Like this:



The other commenter was asking if it was really considered a fee simple home or a condo. In that sense it is a condo and the insurance policy is a condo policy. However, we do not share any walls and it is a free-standing home as in your first picture.
 
Very short answer. Condo policies come in 2 flavors. Walls in and walls out. You have a walls in policy (from what you described) which means it pays to put the kitchen cabinets back in, flooring, light fixtures, etc. Basically, as purchased new if no upgrades were ordered.

This is why it gets complicated. Without reviewing the original sales data (which nobody has) its hard to know the cost of the upgrades, much less the upgrades done over time.

If in doubt, add $50K in extra dwelling coverage. Its amazingly inexpensive.

If you have a walls out policy, then it only covers the 2x4's out, you have to do the kitchen, bathrooms, flooring, etc. You need more coverage in this situation.

Condo - everyone has their own definition of what a condo is. That part gets confusing depending on who you are talking to. Unfortunately, where there are a few freestanding single family homes within a Condo association they are frequently covered differently on the master policy and sometimes require different coverages.

Correct, it's walls-in using your definition. We are only responsible for improvements, and I know what we've added but not what the original owners added. As you noted it's easy enough to add $50K extra and I don't want to be picky about that. According to more info I received from the HOA's insurance agent, the HOA itself would choose the builder and it wouldn't necessarily be the original builder. The original builder is upscale with an excellent reputation for quality millwork and their base level choices for flooring, counters, etc that are significant upgrades over other builders. Would we be going from steak to hamburger in a rebuild, and if so would carrying add'l "dwelling" coverage help in a situation like that? Those are the things I'm thinking about now. Basically whether I should go with something like $100K-$125K or stick with the current $300K.
 
I thought I posted a response to these things a few days ago, but they did not show up for some reason, so let me try again:

>>Did this not register with you<<

It is a free-standing home like your first photo, but the other poster was a asking if it was a condo or a fee simple home. In that sense it is a condo and that was what I was responding to. The auditor's site, for example, lists under use code "550 condominium residential unit."

>>Very short answer. Condo policies come in 2 flavors. Walls in and walls out. You have a walls in policy (from what you described) which means it pays to put the kitchen cabinets back in, flooring, light fixtures, etc.<<

This is my understanding as well. I agree with adding an extra $50K just to cover things. We've added $30K in improvements but I don't know what the previous (original) occupant added, so I'm actually thinking of rounding up to $100K to be safe. If this place burns down, my understanding from further discussion with the HOA's insurer is that the HOA gets to decide who replaces the home. The original builder has a strong reputation and uses quality materials, good millwork, etc. Their base flooring, for example, is better quality than the base flooring installed by other home builders in the area. Could the HOA bring in a cheaper builder who sure, puts everything back in, but gives you a lower grade of material? So that is what I'm wondering about now and if I should get more coverage for it (or if that would even help).
 
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