Sooo…..You have just received a call from the listing agent for a lovely water front condo His seller has accepted your customer’s purchase offer. You advise your buyer that the seller wants to close asap. This unit has had substantial remodeling completed and the subject of insurance comes up. So…….. will the Association Master Policy cover any of the improvements? How does the HO6 Condominium Owners Insurance Policy insure these improvements? What is covered by the HO6 policy?
Personal property or contents is covered for this loss to the limit purchased for Coverage C, Personal Property. As distinguished from personal property, “Additions and Alterations” are those properties which comprise a permanent attachment to the condo unit and are installed within the perimeter walls, floor and ceilings of the unit. This includes items originally installed, as well as improvements made by the unit owner.
Since 2008, Florida Statutes provides that the word ‘building’ does not include floor coverings, wall coverings or ceiling coverings, electrical and plumbing fixtures, appliances, air conditioner or heating equipment, water heaters, built-in cabinets and tops included within the perimeter walls, ceiling and floor of a unit and the unit owner is required to repair or replace these items.
Any such interior items additionally installed by the unit owner after acquisition of the unit, or any increase in value created in upgrading the existing interior items, would have to be protected by the unit owner unless responsibility is assumed by the condominium association and covered by the association insurance. These items are covered under the Condominium Owners Insurance Policy, Form HO6 as Coverage A, Dwelling/ Building.
This Coverage A Loss Exposure demands very close attention of the condominium unit owner.
Two important questions must be resolved:
(1) what property is the responsibility of the unit owner, and
(2) what is a proper valuation of such property?
When purchasing Condominium Unit Owners Insurance, it is important to determine the following:
- What do the condominium documents say about which “building” or Additions and Alteration items you are responsible for, to insure and maintain?
- What improvements were made to the unit by previous owners. Can you obtain costs of improvements?
- Have there been any previous insurance claims involving this unit or building?
- Determine if you are responsible for roof covering or any part of air conditioning system?
- Has a Windstorm Mitigation Inspection been made for the Association in reference to your building? This report can yield premium credits for your Condo Unit Owners Policy.
- If the unit is older, have the baths and kitchen been remodeled? Has the AC system been replaced? Has the roof been replaced? Has the electrical system been upgraded?
- Ask about any “large deductibles” that apply under the Association insurance policies. You may be assessed for a portion of these deductibles at the time of a loss.
- Are there any pending Loss Assessments that apply to your unit?
- Will you need Flood Insurance? We can help you understand your risk.
SWFL Insurance Agency has the ability to help you accurately establish the value of your Additions and Alterations coverage.
We have competitive rates and have carriers that can provide HO6 policies that include Wind and Hurricane coverage for properties on the Islands and beachfront, as well as Inland properties. Quotes for an HO6 are Quick and Free.
Call SWFL Insurance Agency us at 239-265-9577 or visit www.SWFLAgency.com.