by Guest » Thu Aug 06, 2009 10:23 pm
Help! I need some guidance or maybe someone could point me to some references on the net that may help.
I'll be closing soon on an "apartment-style" condo. According to the builder, the individual homeowner is responsible, from an insurance prospective, for everything from the drywall inward (note that the central air/heat unit and the tankless hot water heater are within each unit per that definition).
Based on the above, I know that I don't have to insure my unit for the entire purchase price since the purchase price includes my pro rata share of the entire building and common areas as well as the builder's profit. A lender is not involved in this transaction, so the amount of dwelling insurance I get is my own choice. My insurance agent has said that a lot of condo owners insure for a nominal amount, say $10,000. It obvious to me that this is woefully inadequate since $10,000 probably wouldn't even cover the kitchen cabinets.
I did some net research. One site said $10,000 is an appropriate amount. Another site said $100 to $300 per square foot (gigantic range and resulting level of insurance seems way to high even at the $100 s.f. level). Another site said 20% of the purchase price, but provided no rationale.
Anybody out there that can point me in the right direction. I'm currently at a loss.
FYI, the purchase price of the unit is approximately $230,000 for 1,658 s.f.. There are 16 identical units in each building and the final buildout calls for a total of 20 buildings in the complex.
I'll be closing soon on an "apartment-style" condo. According to the builder, the individual homeowner is responsible, from an insurance prospective, for everything from the drywall inward (note that the central air/heat unit and the tankless hot water heater are within each unit per that definition).
Based on the above, I know that I don't have to insure my unit for the entire purchase price since the purchase price includes my pro rata share of the entire building and common areas as well as the builder's profit. A lender is not involved in this transaction, so the amount of dwelling insurance I get is my own choice. My insurance agent has said that a lot of condo owners insure for a nominal amount, say $10,000. It obvious to me that this is woefully inadequate since $10,000 probably wouldn't even cover the kitchen cabinets.
I did some net research. One site said $10,000 is an appropriate amount. Another site said $100 to $300 per square foot (gigantic range and resulting level of insurance seems way to high even at the $100 s.f. level). Another site said 20% of the purchase price, but provided no rationale.
Anybody out there that can point me in the right direction. I'm currently at a loss.
FYI, the purchase price of the unit is approximately $230,000 for 1,658 s.f.. There are 16 identical units in each building and the final buildout calls for a total of 20 buildings in the complex.
Posted: Fri Aug 07, 2009 12:58 pm Post Subject:
My insurance agent has said that a lot of condo owners insure for a nominal amount, say $10,000. It obvious to me that this is woefully inadequate since $10,000 probably wouldn't even cover the kitchen
I agree that's just plain stupid..I would try to figure out what it would cost me to total reconstruct the interior..in the event of a total burn, how much would it cost? Your builder should be able to help with that...since prices vary from region to region, it would be difficult to tell you...But I would think that you would want to cover yourself for this type of occurance.
Posted: Mon Aug 10, 2009 01:08 pm Post Subject:
I agree that's just plain stupid..
True
Anyway, OP maybe you could sit down with a pen and paper and make a list of all those that belongs to you inside your condo and all that you want to protect against any damage. Like Lori said, you may try to figure out how much it would cost you to reconstruct the interior of your condo if any damage happens.
Posted: Mon Aug 10, 2009 02:13 pm Post Subject:
I think you _really_ need to sit down with a local agent and go over this information.
What _exactly_ do you own? If your purchase price included part of the common areas why would you not have part ownership in this areas? As such, if they were damaged do you have to pay to have them repaired? Is your condo policy going to cover that? What if there is a total loss of the building... do you no loose your interest in these common areas? There are _many_ questions that you need to consider as well as the coverage under certain condo policies.
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