16 Aug What Condo Home Buyers Need to Know About Insurance 8.15.16
So you think you might have found your new dream home in a condominium neighborhood! Perhaps what’s pulling you is the beautiful way the home is designed, the clean, open rooms. Maybe it’s the great, convenient location and the magnificent natural views.
Whatever is attracting you to your new home may leave you with one blind spot, something that we see falling through the cracks far too frequently: Insurance. How much are you going to have to pay in monthly premiums to insure your new home? And, even more importantly, exactly what does this insurance cover?
Condominium home buyers should know that most condominiums are only insured up to the studs and then the individual owner has to take it from the studs on in. That means the entire contents of the room is not insured by most condominium home insurance policies. Now, that’s a little less than having to re-build the whole structure but it still costs a fair amount.
I’m happy to say that Cornerstone Development’s insurance policies are very different than that. We insure full replacement of the home the way they bought it from us. Our buyers only need to insure the contents of their homes and average paying about $150 per year for this. That means they save on average between $300 – 500 a year on insurance costs.
So, as a new buyer, regardless of where you are considering buying a new condominium home, there are a few questions that you should definitely ask your sales representative.
For example, where in the buyer’s declaration does it spell out the exact insurance parameters? Where does it show me what’s covered and what’s not covered so I can get a better understanding for what my budget is going to be? You should also ask about the budget for the Home Owner’s Association. What does the HOA insurance cover?
Buying insurance for a condominium home is different than for a regular residential home. Because there are shared walls, condominium insurance generally covers the outside and the liability. For a single family home on the other hand, you’d better have insurance to replace the whole building.
Where Cornerstone Development differs from other condominium home builders is that most of our competitors only cover up to the studs. This means they then require the home owners to insure from the studs on into the home.
As the developer, if I buy a commercial insurance package to replace the whole building, it’s less than if each individual person has to go out and buy their own stud-in insurance. Like I said earlier, the buyer saves between $300 – 500 per year. Yes, you have to pay a little extra in Home Owner’s Association dues because they have to pay for insurance. But because it’s done collectively like other services there are savings for you to enjoy.
The bottom line is this: when you decide on which condominium home you want to buy, make sure you understand how the insurance works. What is covered and where your liability begins. By all means, make sure you are not paying too much for insurance because you are over covered. I see that happening all the time. When I hear that someone is spending $600 a year on insurance, I know there’s a problem because it shouldn’t cost nearly that much.
It’s a nice treat to open someone’s eyes to the fact that, ‘Hey! We’re going to save you some money here!’ Cornerstone Development can do this because of the way we’ve written our documents. If you have further insurance questions regarding a condominium home, contact your sales consultant at Cornerstone and we can shed a lot more light on the subject.
Update: The Glen of Greenfield
Everyone here at Cornerstone Development is really excited with happenings at our latest condominium neighborhood, The Glen of Greenfield! The lumber is going up on the Clubhouse. We’ve also dug our first homes and all is going well.
We welcome people to start driving out to the site now because the more you wait, the less chance you have to get the spot you want. And, once we have our Grand Opening it will be a madhouse and it will likely get sold out. Come on out to 3840 S. 116th Street (just north of 116thand Howard Avenue). We can meet you there and give you a tour to show you how beautiful your new home location will be!
Check it out. We’d look forward to meeting you!