Condo building “master insurance policy” could leave you unprotected
Many condo master insurance policies will only pay to rebuild your unit's shell, so if you don't have an individual policy, this could be your "welcome home." (Photo courtesy of Amaxson, via Wikimedia Commons)
New York City real estate is back. The New York Times recently wrote about a $1.875 million open house in Manhattan that drew more than 200 people, as well as 14 bids. Clearly, people are ready to buy property again. But are they taking the right steps to insure it?
If there is one thing that Gotham Brokerage has learned over 50 years, it’s the fact that New York property insurance rules can be tricky. Here are some Manhattan condo insurance tips that can help protect your investment. The tips apply to co-ops, too:
Tip No. 1: Don’t rely on the building’s insurance
Your monthly condo fee will help pay for a “master insurance policy” for the building, so you’re covered if your unit is damaged, right? Wrong!
Master insurance policies cover repairs to common spaces, such as hallways and entryways, as well as the exterior of the building — but that protection largely disappears once you walk through the door into your unit. The building policy will pay to rebuild a shell of a unit, but the rebuilt unit will often be bare bones.
Your nice kitchen? Gone. The replacement will be basic. Your premium hardwoods? Expect cheap carpet. Some building policies don’t even pay to have plumbing or electrical reinstalled.
A personal condo insurance policy is needed to properly cover and restore your unit.
Tip No. 2: Protect yourself from lawsuits
If someone gets hurt in your unit, and they can argue that it was your fault, they can sue you. Your building’s master policy offers no protection. A personal condo insurance policy, however, will pay for your court expenses and settlement costs.
A personal policy will also cover damage that you may inadvertently do to a neighbor’s property — such as a leak that seeps into a neighboring apartment.
Tip No. 3: Keep a roof over your head
If disaster strikes, your unit may become uninhabitable. The situation is even worse, though, if you’re not covered for “loss of use.” Your personal condo insurance policy should help you pay for new living arrangements while your unit is being rebuilt.
Tip No. 4: Take inventory of your belongings
Take stock of your entire wardrobe, all your furniture, computers, TV, appliances, china, silverware, holiday decorations, etc.
How much is it all worth? If you don’t have a personal condo or co-op insurance policy, then it could all be worth “$0” in the event of a fire or theft. A building’s master insurance policy will not cover your personal belongings, which is another reason why it’s important to have a policy that covers your unit.
Whether you are buying a condo, renting an apartment or buying into a co-op, Gotham Brokerage can help you quickly find insurance. Give us a call at 212-406-7300, or visit us at www.gothambrokerage.com.
