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Townhouse Insurance

Townhouse Insurance

A friend of mine sent me an email last week asking me to provide her with an insurance quote for her new townhouse that’s under construction in Plano, Texas. She’s looking forward to moving into her new home in April once everything’s finished. In order to provide her with the right kind of townhouse insurance, I needed to know one thing, what does the homeowner’s association insurance policy cover? Townhouse insurance can be written in one of two ways, either as a single-family home or as a condo. The key to knowing which way to write the policy is determined by the homeowner association policy. Single Family Home Coverage: When the association policy does not provide coverage for the townhouse roof, exterior walls, and foundation, the townhouse insurance will be written using a single-family home policy. This means the policy covers the entire structure (roof, exterior siding, foundation, interior finish out, etc.), as well as, the owner’s personal property or contents. Condo Coverage: If, however, the homeowner association covers the townhouse’s roof, exterior walls, framing, and foundation, a condo policy is used. This is because the HOA policy covers everything but the walls, or sheetrock, in. A condo policy provides coverage for the interior finish out (sheetrock, fixtures, floor coverings, cabinetry, etc.), as well as, the owner’s personal property. Interestingly, more and more townhouse communities are taking this approach with their association insurance policies. The one option that is important to add in this instance is the homeowner assessment coverage. As I mentioned last week (see http://wiseinsurancegroup.com/important-condo-insurance-option/), this coverage protects the townhouse owner in the event they are assessed for an association claim such as having to replace the roofs after a major hail storm. Confirming this for my friend simply took me contacting the HOA member responsible for the association’s policy. They confirmed my friend only needed a condo level policy, not a single-family home policy. Providing her with the right policy means I didn’t write the wrong policy leaving her with too much or too little coverage. It also meant a significant savings, somewhere between $500 and $1,000 a year which made her very happy! What do you think? Share your comments, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you! Thanks! Ed Wise         #getwiseinsurance Share...

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A Very Important Condo Insurance Option to Have!

A Very Important Condo Insurance Option to Have!

Condo insurance policies, like home and renter’s insurance, have many options that can be added to the policy. There are options for water leaks and the damage they cause, home equipment breakdown coverage, replacement cost versus actual cash value coverage, identity theft, credit card fraud, and even scheduled items coverage. There is one option no condo insurance policy should be without though, and that is homeowner’s assessment coverage. The homeowner’s assessment option provides coverage for the condo owner or buyer when the Homeowners Association, or HOA, assesses the owner to help pay for repairs to the building or roof that the HOA policy doesn’t cover or provide enough coverage for. Let’s examine what it does and doesn’t cover. What It Covers: This covers any assessment that is requested resulting from an insurance claim. For example, if there is a bad hail storm and the roof(s) need to be replaced, this option would provide coverage if the association assesses owners to help pay for replacing the roofs. Other examples include assessments for a major plumbing leak, a fire, or severe wind damage. What It Doesn’t Cover: HOA assessment coverage does not cover assessments that are not related to an insurance claim. This could be for cosmetic updates, new pool furniture, maintenance items, etc. Those, unfortunately, will be paid from on an out of pocket basis by each owner. Most condo insurance carriers provide limits ranging from $500 to $50,000. I usually recommend carrying a limit of $25,000. The cost to add this to a policy ranges from $0 up to $150 per year which is much easier to handle than an assessment of $25,000! What do you think? Share your comments, questions, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you! Thanks! Ed Wise         #getwiseinsurance   Share...

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