HO-6 insurance: How much condo insurance do I need?
I am trying to find insurance to cover a condo that is owned by an Estate for about another 6 months. It will not be permanently occupied, but it will not be vacant. I need coverage for the interior of the condo (carpet, fixtures, etc), but not the furniture or other loose contents. I also need liability insurance. I have been having trouble finding anyone who will cover this. Any suggestions?
Any property and casualty agent in Florida should be able to help you obtain an HO-6 condo owner's policy. But this would provide more coverage than you require. You could not make any claims for personal property that is not yours (and in which you have no insurable interest), even though the policy declarations would provide coverage for it, unless specifically excluded by endorsement.
Do all the Lenders require this with all condo loans now? If so, how much would be considered adequate amount of coverage?
If a lender wants to make it a condition of borrowing money, then so be it -- there is no law that prevents them from doing so. Although you might not think so, the lender is doing you a favor by requiring it. If you fail to maintain the coverage, they may "force place" coverage on you, and it will be A LOT MORE EXPENSIVE if you let them do that.
The Association's property and liability policy does not cover the inside of your dwelling under most circumstances. An HO-6 covers your property from the inside walls, in, and the association's policy covers from the inside walls, out.
If someone/something else (other than you) causes a loss, while the Association's policy would replace the drywall, they won't be responsible for painting or wallpapering it.
But liability losses for damage to the Association's (and other persons') property you cause through negligence are a different matter.
If you cause damage to the outside walls from the inside, your HO-6 liability policy will cover that loss up to whatever limit you purchase. The Association's CC&R's may describe how they must purchase insurance with a $10,000 deductible, perhaps. If that's the case, you would want to purchase at least $10,000 of property liability coverage in order to indemnify them for any loss you cause. But that could be very much insufficient. Carrying $100,000 or more of total property and personal liability protection wouldn't cost you that much more per year in premiums -- your negligence (or that of a member of your household, like a child) could cause losses to your neighbors' personal property for which you could be held separately liable.
Review your CC&Rs and/or talk to a local insurance professional who has better "local" knowledge of your need. Compared to the possible out of pocket expense in the event of a loss -- which might never happen, of course -- the annual premium expense is tiny. You've dodged a big bullet up to this point, but now that you know the gun is loaded and pointed in your direction, you need to get some protection. for your own well being.
CA-licensed Life & Disability Analyst. CA Insurance Lic #0596197. Also investigating insurance company abuses, and providing litigation support/expert witness services. Send me your questions, and I'll send you my answers.Source: www.ampminsure.org