Realtor Training. Lesson 2: How to insure a condo. Does the HOA really have your back?

Do you sell many condos?

Do you know how important LOSS ASSESSMENT coverage is on a condo’s homeowners insurance policy?

Question:  How is the homeowners insurance policy on a condo different than the homeowners insurance policy for a single family residence?

Answer: A single family residence needs a regular homeowners insurance policy that insures the interior and exterior of the structure.  A condo only needs a “Walls In” homeowners insurance policy, also known as an HO6 policy.  If a condo building burns down, the HOA master insurance policy will pay to rebuild the exterior of the building.  The condo owners needs their own HO6 of “Walls In” policies to insure their individual units.

Question: What is Loss Assessment and why is it so important?

Solution: Don’t allow your buyer to go online and get a cheap homeowners insurance policy from Geico.  If they do this, they will most likely not get enough Loss Assessment coverage and could be out of luck.

We recommend at least $15,000 of Loss Assessment coverage.  In the future, as costs continue to rise, we might recommend $20,000!