Like many, real estate wasn't my first career. For 9 years after college, I slugged it out in the insurance business working as an agent selling property and casualty insurance for a large regional carrier. Somehow I took a keen interest in condominiums.
In my observations, I found that often times while "quoting" a prospect, they were "uninsured" or "underinsured" with respect to their condominium. Often times coverage levels were ascertained by default levels of quoting programs and not by an educated evaluation.
After that career, on a whim, I decided to head to Florida after several hurricanes hit to help out as an emergency adjuster. It was an interesting experience. After years of working in the sales end, being on the other side was an eye opener. Also, having worked for a highly service oriented company in the midwest, it was appauling to work with the below standard company's that are "left over" in Florida. One of the most difficult claims to explain to someone was a condo owner. The repair estimate came up to around $75,000 and they only had about $5,000 worth of coverage on their Coverage A "Dwelling" portion of the policy. On regular houses, this coverage would pay the expense to rebuild the structure, so many agents and condo owners would assume that the need for this coverage is minimal. The time to find out how much coverage is needed should be considered when buying a policy, not when filing a claim! Most condominium master policies (owned by the association on the common elements) will pay for the structure up to and including the drywall of the condo unit. Wall finishes, cabinets, vanities, flooring, countertops and finishes are paid for by the condo unit owners policy .
After my experiences in the insurance sales and claims of condominiums, there are some key points to consider.
1. A condo policy ISN'T a "Renter's Policy". I can't begin to tell you how many closings I've sat in where I've heard a lender advise my client to buy a renter's policy.
2. Having extra personal property coverage can not be used for damage to the building.
3. Placing the correct amount of insurance on the dwelling is usually not expensive at all.
4. Insurance company's make it extremely hard to blame them after the fact for not offering you enough coverage.
5. Make sure you consider additional coverage for condominium asessments.
This blog post is not meant to provide guidance other than to find an insurance agent familiar with insuring condominiums that will truly serve your needs. Contact me if you need a referal to a great insurance agent in the St. Louis area.
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