If you are a Miami condo owner or renter, you need the right insurance to protect your unit and the valuables in it. Note that buying condo insurance is different from buying home insurance. Miami condos usually have associations and they provide a certain level of insurance for owners and renters. The condo association fee covers a few things so you no longer have to cover those again when you buy insurance. However, the coverage provided by the association is often not enough, so you need to get extra protection to enjoy sufficient coverage.
The Condo Insurance Crisis in Florida
These days, finding a condo insurance that will meet your needs is not as easy as it once was. Condo owners across Florida are running into obstacles in meeting the insurance requirements for their condos. Insurance companies in the state are increasingly dropping coverage options for condos, making it quite daunting to find a firm that is willing to cover a condo in this side of the country. Those that still offer condo insurance either raised the cost of coverage or extend their coverage to units that have been constructed based on stricter building code standards following the onslaught of Hurricane Andrew in 1992.
Condo Insurance Requirements
Recently, there have been significant changes in terms of the insurance requirements that mortgage companies are demanding. A few years back, in order to close escrow you only need a certificate of insurance from the Home Owner Association's Master policy. This was enough but today, mortgage companies are requiring a new owner to furnish a copy of the Condo Unit Owner's Policy. Moreover, this should include building coverage enough to protect the mortgage amount. This means the lender no longer recognize the existence of the master policy. The owner is therefore left with no choice but to pay for duplicate coverage.
The recent economic crunch and the number of HOAs experiencing fiscal problems are the likely reasons behind the requirement of a separate policy. A number of HOAs are allowing policies to cancel for non-payment. There are cases when individuals and mortgage companies only find out that there is no insurance on a condo after making a claim. While Miami condo properties continue to be a great way to own a high end property, you should know what is going on in your HOA and find out how financially sound it is.
How to Buy Condo Insurance
Review your condo association contract to see what it covers. The association fees usually cover the roof, the exterior of the complex and other shared areas. Determine the amount of condo insurance coverage you'll need. As a rule, it must cover half the market value of your interior structure. Figure out if you want cash value or replacement condo insurance. The cash value means youll receive payment for the depreciated value of the things you've covered. With the replacement condo insurance, youll be paid for the full value of the items. Make sure you buy insurance from a reputable company that delivers quality service and quick response to claim issues.
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