Insurance & Warranties

Condo Insurance, Hazard Insurance, Home Warranty – Do You Really Need All Three?

A client asked me the other day why she need hazard insurance?  Wasn’t the bank paying for the insurance as part of our offer?

I explained that the bank was paying for the home warranty, not the hazard insurance, and that when you purchase a condo, there are actually three types of insurance/warrantys that should be considered.

What’s the difference?

Home Warranty

The home warranty covers many items in the home for the first year.  For instance, if the garbage disposal were to break, the warranty would cover it, provided it was a covered item after the buyer paid a co-pay, similar to health insurance.

Hazard Insurance

Hazard insurance is often referred to as fire insurance.

In a condominium, the hazard insurance is usually paid for by the condominium association and covers all of the units.

Condominium Insurance

If the hazard insurance is paid by the association, why would I want a condo insurance policy?

The association’s insurance only covers the outside walls.  Anything inside is the responsibility of the owner.  This includes flooring, cabinets, carpet, toilets, etc.  Without a condo policy, the owner would be responsible for paying to replace all of these items, never mind the personal property lost.

Condo insurance is usually fairly inexpensive, a few hundred dollars a month, depending upon coverage.

If you don’t have it, you should talk to your insurance agent or give me a call for a recommendation.