Our Condo and Town-home prices had shot through the roof these past few years and with so many HOA's getting into trouble with lack of funds, it has increased the chance of Owners being further burdened with assessments that they cannot afford.
There is an opportunity for owners to add assessment coverage to their Insurance policies.
It's a very reasonable rider and whenever I write a Condo or Town-home policy, I always ask the owners to check the soundness of their HOA reserves. Look at the age of the roofs, plumbing, electrical, swimming pools, age of the buildings (many HOA's repainted and put in new landscaping to lure new buyers, w/o upgrades to electrical/HVAC/Plumbing/Sewer or building code).
Does the HOA have Flood or Earthquake coverage?
Many people buying smaller places are retired and do not anticipate a major increase to their monthly payments. A major loss with an insolvent HOA could leave them homeless!
Is the HOA solvent enough to cover a major loss or will the new owner have to pay? There is coverage available.
Comments (3)Subscribe to CommentsComment