If you’re buying a co-op or a condo in New York City, you also need to plan on buying co-op or condo insurance—so it’s a good idea to budget for that cost. Your building will have a master insurance policy, but that only covers the concrete shell of your apartment and common spaces.
While of course it’s prudent to get co-op or condo insurance, it’s also often a requirement of your building or your mortgage lender. In fact, mortgage lenders tend to be stricter than buildings. They often require condo owners, for instance, to insure the interior structure—walls, floors, built-in renovations—for at least 20 percent of the loan.
The cost of co-op vs. condo insurance in NYC
There’s not much difference in the cost or the specifics of co-op or condo insurance in New York City.
“The prices are the same and the contracts are virtually identical, too,” says Jeffrey Schneider, president of Gotham Brokerage. “The right degree of coverage is what matters.”
The pandemic has brought on a series of changes, however.
“It’s a good idea to give your current insurance a fresh look. Water damage, broken pipes, theft and burglary are up now that many people are spending more time out of NYC. Also, if you have renovated or are thinking about renovating, you should make sure your coverage reflects it. Some people are also looking to downgrade from some of the more expensive policies,” Schneider says.
Degrees of coverage
For the most bare-bones coverage, prices start at about $350 per year.
“A basic policy for $380 to $400 or so would cover $25,000 of contents, $20,000 for the walls and floors, and $100,000 of third-party liability. Exact pricing varies by location, credit score, and underwriter approval,” Schneider says.
Liability insurance covers events like someone tripping on a rug and being injured in your apartment, a neighbor who gets bitten by your dog, or, more commonly, water damage to someone else’s property from your overflowing tub, washing machine or toilet.
Most basic co-op and condo insurance policies come with $100,000 worth of liability coverage. While that’s not chump change, paying an additional $70 more a year will buy you $1 million in coverage, so it’s probably worth it to be safe rather than sorry.
Considering that it costs at least $300 per square foot to rebuild an average NYC apartment, you could use up the allowance of basic coverage pretty quickly in the event of extensive water or fire damage. A policy that costs $580 to $650 a year will cover up to $50,000 of your contents, $50,000 for walls and floors, and offers $300,000 in liability coverage.
If you’re buying an apartment in the mid-six-figures or higher, you’ll probably want to spend more. Insuring a 1,100-square-foot prewar apartment worth $1 million would cost around $1,400 to $2,800 annually—depending on location and expansiveness of policy terms—with $100,000 contents coverage, $300,000 walls-and-floors coverage, and $1 million liability coverage.
Factors that affect the price you will pay
Insurance rates in NYC are similar to those in other markets around the country, although Schneider reports that local rates have increased significantly recently due to rising construction and material costs as well as significant water claims tied to changing weather patterns and aging pipes.
“We have lots of old pipes bursting, as well as severe weather events,” Schneider says, noting that water damage is one of the firm’s most common claims. Click here for the top three claims.
How much coverage you want is a significant factor in how much you will pay, but it’s not the only one. Other variables that impact your cost include zip code, building construction, and your insurance score. The last one being an assessment of your risk based on prior claim activity and your credit score.
Another one to think about: Your proximity to water—as in a shoreline. (The concern is not so much flooding due to rising waters—that requires separate coverage in any event—but wind damage from coastal storms.)
“Crime rates do not have a huge impact, but if you have a location by the water, you often cannot get standard coverage,” he says. In that event, your insurance agent may be able to find coverage from a small number of carriers that insure properties in flood zones.
Some factors that can work in your favor to help you get the best rate include having sprinkler and alarm systems, living in a doorman building (where someone is on site monitoring comings and goings), and phone-based security/low temperature warning apps or systems like Nest. Essentially, something that adds an additional level of security or reduces risk can help.
Keep in mind that you may need to pay more to insure certain items or equipment. Fine art is typically covered under general contents, but if you use professional equipment as part of your job, that should be insured separately.
Jewelry also requires a separate policy. Rates vary widely by location, but jewelry ranges from $10 to $40 per year per thousand dollars of value. Professional equipment usually requires a separate policy with separate underwriting and policy minimums that can be $250 to $800 and up. Significant art pieces should be insured separately as well.
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