The Condo Landlord Insurance Facts You Should Know
Every investor should have a Dwelling Fire Policy. It’s actually the same thing with a landlord’s policy. In this article, we are going to talk about the different types of insurance for condos. There are also different types of transfer for every type of building. Those policies are: Condo Policies Single Family Policies…
Every investor should have a Dwelling Fire Policy. It’s actually the same thing with a landlord’s policy. In this article, we are going to talk about the different types of insurance for condos. There are also different types of transfer for every type of building. Those policies are:
We’re going to focus on condo insurance. One of the biggest misconceptions that we see with a lot of newer investor, is that they buy a condo and say that there’s a master policy but there are a few different things that they should be aware of:
Rule #1: Master Policy Deductible
Master Policy in condo association do not want you to make claims. To mitigate that, what they are going to do is increase the deductible amount. It can be $5,000 or $10,000. We have seen it as high as $20,000, but that means there has to be a law up to that amount for it to kick in, so that means you’re responsible for the $5,000 or $10,000 or $15,000 worth of loss. So imagine if something happens in your unit, you want to make a claim, and it’s $6,000 worth of loss, you need to pay for it. Instead of that, what you’ll do is get the Dwelling Fire Policy that has a much lower deductible. Either $250 or $500.
Let us just pretend again that the master policy deductible is $10,000, what you’ll do is you’ll only pay for the first $250 or $500 depending upon your deductibles. That policy will cover the rest.
Rule #2: Master Policy vs All in Policy
The second rule that we will talk about is whether the master policy is considering all in policy or not. All in means it does cover everything inside of the property, it might be your cabinets or things of that nature. But you have to be aware that it might not include your renovation.
If you just did a major renovation and have these fancy things like high-end furniture, you might not be covered. Again, that’s where the condo policy or your Dwelling Fire Policy will help you. They might only cover originally what the building was like 60 years ago. Just be aware of that aspect as well.
Rule #3: Loss of Rents
Another reason why it’s called Dwelling Fire Landlord Policy is that it covers loss of rents. Your master policy will cover loss of rents caused by a flood or a fire and tenants that are displaced and unable to live in the unit. The insurance policy will cover your rent and give you a year to replace and fix your apartment.
Imagine if you’re a landlord and you had a flood or a fire, and you still have your mortgage, you still have your condo fee, and taxes, which are tenants had to move out, and you have nothing protecting, your Dwelling Fire Policy will cover that with a loss of rent. In addition, you’ll have Tenant Displacement. The Dwelling Fire Policy will typically cover up to $750 of that. You just need to provide receipts.
Again, we are covering insurance policies, condo policy specifically and how it will protect you, and the differences between that and a master policy. If you have any additional questions, feel free to reach out and to Green Ocean Property Management, you get more than a property manager, you get peace of mind.
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