Me and Chad discussed this earlier in the thread. It's a multi story condo complex, so I'd assume the roof issues would be different than a condo community with several 1-2 story units throughout. Same issue with flooding. If there are 100 units in the complex, there might only be 10 effected by roof damage and 10 effected by flood damage. I understand I am greatly (and possibly incorrectly) oversimplifying this, but wouldn't the damage to the bottom level or top level will be spread over the entire complex?

Do you have a separate insurance policy besides what you pay for your condo dues? If so, how much do you pay for the year?

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Posted by Breadcrumbs

Baton Rouge

Member since May 2005

2982 posts

Posted on 2/7/13 at 1:43 pm to Chair

Master Insurance Policy on Condo find out if premium is covered in monthly dues
does it cover the inside or just the outside dwelling
does it include improvements and upgrades like wood floors and granite, if it covers the inside
what is the deductible and hurricane deductible?
does the balance in the HOA account come anywhere near covering that deductible amount?

for your individual property insurance
if the Master Policy doesn't cover the inside structure, then get dwelling property insurance for an amount that will cover walls,cabinets, floors, fixtures. You should also get contents insurance for your TVs furniture, clothes, etc. I would load up on Liability insurance in case you burn the whole building by negligent grease fire or something. Finally, buy Loss assessment which is very inexpensive and covers you for any losses that the insurance couldn't pick up for damages because they were lower than the deductible.

Some other things to consider:
what is the history of assessments for property upkeep (new fences, painting buildings, etc.)

What is the history of Master Policy Insurance Premium increases on the property? It's getting harder and harder to insure condos and insurance companies are not covering them anymore or increasing premiums rapidly. The monthly HOA dues are becoming all insurance premiums and less about stockpiling cash for repairs/improvements.

is the association approved for FHA loans? if there are a lot of rentals (more than 50%) - which happens when there are a lot of identical units for sale at the same time and for extended periods - then FHA might not approve financing for new owners. Any buyers would then have to come up with 20% down or the owners are coming way down on price to attract suitable condo buyers. There are a few more requirements to get FHA approval as well.

your condo investment is dependent on the health of the other units and the properties in general and the management of the HOA. Healthier properties have stockpiles of cash in bank accounts to handle repairs and insurance.

Some people prefer controlling their own investments and thus get detached dwellings.