Got renter's or condo unit insurance?

I’m constantly amazed at how many people don’t get renter’s insurance when they are renting a house or apartment. Did you realize that if a major catastrophe happens to the property you’re renting that the landlord is not responsible for your belongings?  You should.

Renter’s insurance is relatively inexpensive for the peace of mind that it will give you. Not only are you covered if a major issue happens to the property and damages your belongings, you can also check to see if the policy will cover you in the event of a break-in. Most people don’t consider the fact that a water heater might blow out and cause flooding to the interior of a property. This event could damage clothing, furniture, or more. The landlord will likely be responsible for fixing or replacing the water heater but they won’t be responsible for your stuff.

A while back we were representing a buyer on the purchase of a 20-unit apartment complex. There were 2 buildings with 10 units each. For some bizarre reason the seller decided to replace the roofs mid-contract. Unfortunately for her it rained right at the time the new roofs went on and 4 units were ruined and more were damaged – along with the tenant’s belongings. Thus began a nasty fight between her and the tenants – several moved out, resulting in lost rents, and others started attempting to boycott the property and prevent others from moving in to replace those that chose to move.

The majority of these tenants did not have renter’s insurance. More landlords are getting savvy and are adding provisions to their lease agreements that spell out a requirement for renters to show proof of insurance within a short period of time of moving in. My own lease agreements have similar language and it states very clearly that I’m not responsible for their stuff if something happens. Nature can impact a property at any time – I had this happen when a neighbor’s tree smashed into my duplex roof a couple of years ago. Thankfully my tenant’s didn’t get impacted but they could have since the tree punctured holes in the roof. Thankfully we got the roof repaired pretty quickly so no major damage occurred but it could have been ugly.

New condominium buildings are also requiring owners and tenants to have contents insurance. For owners of these units the requirement is that the policy cover up to the deductible of the homeowner’s association policy. Frequently that amount is roughly $50,000.00.  These are good things to know. Many of the condo sales require proof of insurance at closing so be sure to contact an insurance company prior to the end of your transaction if you’re in the process of buying. One guy I know that can handle this for you is Gerald Grinter of Gerald Grinter Insurance.  He can handle policies for condo owners and renters.

14 thoughts on “Got renter's or condo unit insurance?

  1. It is amazing how many times people are UNDERSOLD on their condo- homeowners insurance. I have heard of many cases were someone buys a $200,000 2200 sq ft condo goes to their insurance agent and is told that they only need about $20,000-$25,000 of homeowners insurance.
    What will $20,000 replace?

  2. Yes, and it’s important also to know how your condo building separates out the ownership of the units. Do you own to the center portion of the walls or do you own from the drywall out? That can make a difference in what needs to be covered as well.

  3. Wow – great advice & timely article….most “renters” will assume – “It won’t happen to me” stand. Now, condo home ownership. My advice, talk with an insurance agent that is VERSED in condos/HOA, etc. thank you Reba!

  4. Condo Unit Insurance: Don’t forget to get a supplement to the HOA insurance to reduce the deductible. Take the insurance DEC Page to your insurance agent and have them “supplement” the insurance.

    Many HOA’s are holding down monthly fees by increasing the “per incident” deductible,sometimes up to $10,000 per incident. So if you own a condo, don’t ask for “renter’s insurance” to cover only your belongings. Get the DEC Page from the Resale Certificate and supplement the deficiencies in the Master Policy, with your own policy.

    Often best to use the same insurer as the HOA, if and when you can. This way if you have a claim, they can’t pass the buck, cause the buck stops with them. No finger pointing aruging if it is your policy that covers it, or the HOA policy that covers it. If they are one in the same carrier, no sense pointing to “the other policy”.

  5. Ardell – if one owns a condo, they generally will not qualify for a renters policy (HO-4), instead, their agent should know they need a condo-owners policy (HO-6). It’s not necessary for the unit owners to purchase from the same company as the master policy. The master policy is a commercial insurance policy and the condo-owners policy is a personal insurance policy and usually the divisions operate independently. Many times going with the same company as your auto insurance will get you an account discount, too.

    One of the additional coverages a condo-owners policy provides is Special Assessment coverage (which might be what you’re referring to as supplement). Many policies provide limited coverage amount, but generally policyholders can increase coverage to $50,000 via an endorsement. This coverage covers assessments imposed by the association.

    Reba – Other important coverages included in renters and condo-owner policies is personal liability and medical payments to others. If someone is injured on your property, you’ll likely be liable for damages. Personal liability covers other situations as well.

    It’s always best to review your insurance needs with your agent periodically.

    (an Insurance Underwriter in another life)

  6. Thanks Ben! Great info!

    Love the way you branded your AR blog to coordinate with your Condo Blog, but I miss your smiling face 🙂

    About the “same company”, that is harder to do these days than it was a few years back. In smaller complexes when there are insurance claims like unit 201 leaked into unit 101, the HOA insurer says it is the condo owner’s inusurance company’s problem because it was “owner negligence”. Condo Owner’s Policy says it is the HOA policy. Back and forth. The one time they were both Farmer’s…no arguments 🙂

    Downtown Condos wouldn’t have that, but some smaller garden aparment or short strip townhome complexes, may offer that option.

    So many companies have dropped insuring HOA’s that it is becoming more rare to find a complex insured, by the same company that a unit owner can use.

    But I agree, Ben. Not likely you’d ever find that in a Downtown Seattle condo development. Next time I see one, I’ll come back and post it.

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