subject: Requirements For Condominium Insurance Plan [print this page] During the last several months, we've got began to see modifications in certain requirements for insurance plan that Mortgage Companies are challenging. Before, the only proof of insurance plan that was needed to be able to close escrow, was obviously a certificate of insurance served by the Home Owner Association's Master insurance plan. With this particular document, the Mortgage Company would think about the insurance plan requirement complete, and no one cared in case you protected your personal "Stuff".
Today we're seeing increasingly more Mortgage Companies challenging that the new owner give a Condominium Unit owner's Insurance plan. This insurance plan must include "Building" insurance plan sufficient to protect the mortgage amount. Essentially, the new requirements, mandated by the Loan provider, don't recognize that a master insurance plan exists. This is forcing the new owner to spend more money for duplicate insurance plan.
The current recession in the economy and the number of HOA's that shall no longer be financially sound is most likely the explanation for the mandatory requirement of a separate insurance plan. We're seeing many HOA's letting insurance plans cancel for non-payment. If an HOA is having trouble purchasing insurance plan, they're usually having trouble purchasing normal maintenance. These Condominiums are also prone to higher claim frequencies. The first time that many individuals and Mortgage companies discover that there's no insurance on a Condominium is after the claim!
My personal choice is to always obtain a separate unit owner's insurance plan that will protect my "stuff". My "stuff" includes:
1. Individual possessions (contents)
2. Building Insurance plan (so that I'm not depending on another person to protect one of my largest property)
3. Personal Legal responsibility protection (If I get sued due to the fact someone tripped)
4. Decrease of Use (I want accommodations if the Condo is damaged)
Even though I thinking about renting the Condo for investment purposes, it is simply as essential, if not more essential to have a separate Rental Condo Unit Owners insurance plan. This insurance plan protects my interests as a landlord and the insurance plan includes:
1. Business Contents (Washer/Dryer etc.)
2. Building Insurance plan (so that I'm not depending on someone else to protect one of my largest property)
3. Land Lord Legal responsibility (If I am charged in a business capability)
4. Decrease of Rents. (when I cannot rent the condo since it is being repaired)
by: Jackeline Baltrip
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