Thinking of Buying a Condo or Townhome? You Need to Know This

There is a lot of information you need to know when purchasing a Condo or Townhome.  This is one thing no one mentions that you might want to know.

A little background history.  Several years ago when I lived on the Island I owned a Condo as an investment property.  Somehow, even though I had been selling real estate for several years, no one ever brought this up.  I am not sure how I found out this little secret in the insurance industry, but I did.

There is an insurance, that is not very expensive.  It is in addition to your home owners insurance.  It is called “Assessment Insurance.”  Yes, you heard me correctly, Assessment Insurance.  I am not 100% sure about all of the rules on it but at the time they offered me $50,000 worth of coverage, for an additional $20 added to my insurance policy.  At first I thought, I don’t need $50,000, but for $20.00 I decided to take it.  

You might be asking yourself why someone would need something like this.  Well, if you remember Hurricane Harvey, and any other hurricane’s that hit the Texas Gulf Coast or anywhere else in the U.S. then you will remember the condo’s that were damaged.  Most of the complexes insurance policies did not have enough coverage to cover the damage that was done.  Most homeowners had to pay an additional assessment for the difference that was not covered.  The amounts I remember hearing were between $20,000 - $80,000 depending on the complex.  Imagine if something like that happened, a natural disaster and you had this insurance.  You would not care if you had to pay $1,000 deductible or even a $5,000 deductible in order to have your assessment paid in full by your insurance company.  

Do yourself a favor when buying a Condo or Townhome.  Ask your insurance agent about Assessment Insurance and add it to your policy.  Most people who own Condo’s or Townhomes, only have enough to cover their furnishings and not all of their cabinets, flooring, sheetrock, appliances, fixtures, etc.

You never know when something is going to happen.  I know we are all insurance poor, but if you consider purchasing a Condo or Townhome, please ask your insurance agent about Assessment Insurance.  You will be glad you did.  Most Realtors don’t even know this so make sure you do your own research.