Insuring a Condo???? - Posted by Gary

Posted by Michael on July 14, 2002 at 20:40:33:

The personal property is usually negligible. The primary reason I would insure this property would be

  1. Loss of Rent(if property cannot be occuppied),
  2. Liability

Insuring a Condo??? - Posted by Gary

Posted by Gary on July 14, 2002 at 12:13:43:

I just purchased a condo to rent out. My question is,do I need insurance on the condo? The association pays insurance for fire and hazard on the building. It is a 6 unit and I own 1 unit. The only things association does not cover is personal property. Wouldn’t the tenant have insurance for that? The things I would be worried about I guess would be appliances, cabinets and flooring. Any input on this would be greatly appreciated.

Re: Insuring a Condo??? - Posted by Rob FL

Posted by Rob FL on July 15, 2002 at 14:18:11:

I’d be alot less concerned about hazard insurance for the inside of the condo. After all, most 1100 sqare foot condos can be totally rennovated from head to toe for say $15,000. The condo association takes care of anything inside the walls or on the exterior of the builiding.

Where you really need insurance is for the liaibility of the rental property. If the tenant or whoever gets injured on the property, they may come sue you. And their lawsuit may or may not be covered under a tenant’s insurance policy.

Re: Insuring a Condo??? - Posted by marc (NJ)

Posted by marc (NJ) on July 14, 2002 at 12:19:44:

On my condo which was taken over on a sub 2 deal, I bought a renters insurance policy to cover the personal items. I just include it in the lease amount for the tenants.Hope this helps.

Re: Insuring a Condo??? - Posted by Gary

Posted by Gary on July 14, 2002 at 12:36:01:

Thanks for the response. Are you saying purchase insurance that would cover the renters personal property? If yes, which is a great idea, how much coverage do you put on it?

One more thing - Posted by Dave T

Posted by Dave T on July 14, 2002 at 14:28:48:

You do not want to provide personal property coverage for your tenants. That is their responsibility. You should have clauses in your lease that specifically state that the tenant’s personal property is not covered by any landlord insurance policy and that it is the tenant’s responsibility to secure coverage.

If you were able to convince the insurance company that you had an insurable interest in your tenant’s personal property, how would you ever prove a loss? Even if a claim were to be accepted, only the depreciated value of the personal property lost would be recovered. Where would that leave you when the tenant is expecting full replacement under the insurance coverage you secured for the tenant’s personal property?

It is far better to inform the tenant that you are not responsible for any loss to their property, and that you do not provide any insurance for their personal possessions – as stated in your lease agreement.

Re: Insuring a Condo??? - Posted by Dave T

Posted by Dave T on July 14, 2002 at 14:20:46:

I think Marc misspoke (mistyped?). As the owner, you do not want renter’s insurance. Instead, you want a landlord policy that covers your personal property provided for your renter’s use. For example, if you furnish the unit, or even just provide a washer and dryer, your furnishings are personal property not covered by the condo association master policy.

Additionally, you might want a personal liability rider. I have several condos in my rental portfolio. For each condo, I purchased a landlord policy with $5000 personal property coverage and $1,000,000 personal liability coverage. Cost for each policy with these limits is less than $100 per year, though I have a high deductible.

Re: Insuring a Condo??? - Posted by marc (NJ)

Posted by marc (NJ) on July 14, 2002 at 15:12:04:

Dave is correct. It is a landlord policy, that cover items ,such as appliances.
But it is still charged to the tenants in the lease amount. Sorry if I was not clear with that info. Thanks Dave