Renters, Condo, & Landlord Insurance
From D.O.K. Insurance Agency
As an all-lines insurance brokerage, we are proud to offer great options to protect you no matter what your property needs are. If you rent an apartment, you cannot go without a renters (HO4) policy. If you own a condo, you better understand the difference between an as-built, walls-in, bare walls-in and whatever other terms get thrown around.
RENTER’S INSURANCE
When you rent an apartment or house, your landlord is not responsible for your personal belongings if they’re stolen or damaged. Renters insurance protects your personal belongings and also protects you if you’re held legally responsible for injuries to another person or guest while they’re visiting your home. Policies start as little as $10 per month.
Most apartment companies will require you to carry liability insurance before signing a lease. They often offer their own policy that makes sure their interests are covered. Please be aware that purchasing your own renter’s policy will offer a wide array of benefits including:
- Higher liability limits
- Coverage for your personal belongings
- Discounts on your car insurance (save up to 15%)
- Reimbursement for additional living expenses
What The Policy Covers
A renters policy usually covers:
- Your personal property in your home, in your vehicle or while traveling
- Your personal liability
- Medical payments for others accidentally hurt on your property
- Living expenses: If you cannot stay at your home for a number of days, weeks, or months, your policy can pay for a hotel room, short-term rental home and other costs involved when needing to move out of your home temporarily.
What The Policy Doesn’t Cover
A renter’s policy usually doesn’t cover:
- Flood. If you need a flood insurance policy or are wondering about your options, please click here.
- Earthquake, landslide, or mudslide. Click here to find out more about earthquake insurance.
- Sewer backup
CONDO INSURANCE
You put an offer on a condo for $500,000, sign a seemingly endless number of legal purchasing documents and receive a copy of bi-laws that were written by attorneys for only legal professionals to understand. Or worse, the bi-laws were thrown together by the HOA board by rewriting templates that were found online.
Since a lot of banks do not require an insurance policy to protect their investment/loan, condo owners sometimes do not either don’t think about getting insurance or choose not to. One big reason is that there is an HOA master policy in place so you are covered, right?
What The Policy Covers
Before we explain how your actual structure is covered, let’s look at what else a condo/townhouse policy offers. There are many benefits a condo or townhouse policy have and policies start for as little as $12 per month:
- To protect your personal belongings such as furniture, electronics, clothes and much more
- To offer liability coverage should you damage the building or be held liable for someone’s injuries.
- To pay for living expenses. If you cannot stay at your home for a number of days, weeks, or months, your condo/townhouse policy can pay for a hotel room, short-term rental home and other costs involved when needing to move out of your home temporarily.
- Loss assessment coverage
- Condo/townhouse policies sometimes offer the same discount on auto insurance as do combining it with a standard home policy.
There are different ways that an HOA Master policy can insure a condo or townhouse building:
As-Built: This would be the most comprehensive form and would rebuild the building and the interior units to the standard the structure was before. Even if your HOA covers the building this way, it’s important to carry a Condominium policy:
- HOA policies carry high deductibles, sometimes $25,000 or even higher. Your personal condo policy can pay for the deductible.
- If you, or the previous owner, made any upgrades to the unit (i.e. stainless-steel appliances, granite countertops), the HOA policy may not pay for these upgrades.
- HOA claims can take months to settle especially if multiple units are involved. Your own condo/townhouse policy will provide coverage right away because liability does not have to be determined. So, if a neighbor started a fire and it partially damaged your unit as well, you may want to get living expenses paid for by your company.
Walls-In: The term “walls-in” is actually not something that you will find in most HOA policies. The main reason is that it’s not really an insurance term. In addition, what is meant by it can also vary quite a bit.
- Walls-In could mean bare walls-in or dry-walls in, for example. Bare walls-in coverage may not include electrical, plumbing, some windows, no cabinets, only the base flooring, no light fixtures, etc. In a nutshell, imagine you open the door to your condo and all you see is sub-flooring, studs on the exterior walls and plumbing and electrical hookups that come from the main supply source.
- (Dry) Walls-In refers to the HOA policy rebuilding the building and each unit. However, it may not pay for kitchen cabinets, permanently installed appliances, light fixtures, etc. The difference in coverage could be $10,000 for an “as-built” policy (to cover a $10,000 HOA deductible and small upgrades), $30,000 for a small condo with a walls-in HOA policy and $100,000+ for a larger condo or townhouse where the HOA only provides a “bare walls-in” policy.
All-In: An HOA policy that provides “All-In” coverage would be the most comprehensive.
a. It is often described as Coverage that is including Tenant Improvement and Betterments (TIB), walls in and interior build out and is subject to the property deductible.”
b. It is usually the most expensive form of HOA coverage as it would cover the property, including outside walls, framing, flooring, electrical, permanently attached appliances, cabinets, etc.
c. A unit owner covered by an all-in HOA policy needs to obtain a policy that covers the HOA deducible (anywhere from $5,000 to $25,000+), covers personal belongings, liability and loss of use among other optional items.
Two must-dos for condo and townhouse owners
- Verify what the HOA master policy covers
- Obtain an individual condo/townhouse policy based on your findings. We are more than happy to help you interpret the information that you receive from your HOA. Bottom line, there is no HOA policy that does everything a personally-owned policy can do.
What The Policy Doesn’t Cover
A condo policy usually doesn’t cover:
- Flood. If you need a flood insurance policy or are wondering about your options, please click here.
- Earthquake, landslide, or mudslide. Click here to find out more about earthquake insurance.
- Sewer backup
LANDLORD INSURANCE
Whether you decided to lease out your last home instead of selling it, or are an avid investor with multiple rental homes, you can find yourself in a financial nightmare if your rental properties aren’t protected correctly. If you own apartment or condo buildings, please CLICK HERE.
Renters Statistics
Over 110,000 Renters in the US
Growth Rate:
INCREASING
Daily Growth: Over 2,600 New Renters daily
Renter Population Factors:
| One birth every | ———————- | 28 Seconds |
| One death every | ———————- | 39 Seconds |
| One migrant every | ———————- | 108 Seconds |
Landlord Statistics
Over 23,000,000 Landlords in the US
Growth Rate: INCREASING
Daily Growth: Over 500 New Landlords daily
Landlord Population Factors:
| One new rental unit | ———————- | 28 Seconds |
| One new renter every | ———————- | 39 Seconds |
| (Other: Property type, Ownership level, Vacancy rates) | ||
Washington State has one of the highest percentage of renters at over 35%. Not surprisingly, places where it is expensive to live such as California, New York and Hawaii will have the highest percentages.
What You Need To Know About Landlord Insurance
While the number of rental units grows each day, so does the responsibility of a landlord. You not only have to find dependable tenants, but you’re also responsible for the property’s maintenance.
What Is Landlord Insurance
Landlord insurance provides financial protection if your rental property is damaged due to an insured event, becomes unlivable after a catastrophic event such as a fire or a storm, or if you are held liable when someone gets hurt on the property.
What Does Landlord Insurance Cover?
Insurance policies vary amongst different companies, but most landlord insurance policies will offer coverage for the following:
Property Damage Insurance
A landlord policy typically covers any physical damage to the home that’s caused by fire, water damage (not from flood), weather related damage or criminal activity such as a break-in. It may also cover any additional buildings, including a shed or detached garage. If you have an expensive detached structure, read your policy carefully to make sure you have adequate coverage.
Liability Insurance
If someone is hurt while living in the rental property or one of your tenant’s guests, landlord insurance may help cover their medical costs, legal fees and settlements. For that to be the case, there needs to be a reason to hold you liable. It is easy to understand why a faulty electrical wire that shocks a tenant can come to haunt a landlord.
Even a tenant’s criminal history or the type of dog they own are important to keep in mind. For example, if you rent out your home to a convicted felon or tenant who owns an aggressive dog breed and either the felon or dog hurt someone in the neighborhood, it is likely that you are held liable since you allowed them to occupy your home.
Loss of income
If your rental home is damaged by a covered loss, and the damage doesn’t allow you to rent it out, most policies will reimburse you for the income lost during that time. These coverages can vary greatly between different companies and policies so read your policy carefully.
What Landlord Insurance Doesn’t Cover
Each landlord should be aware of the following common exclusions or limitations:
- Tenants personal property. Especially tenants think that you, the landlord, should pay for their personal belongings if, for example, a pipe burst and causes damage to their property. You should encourage or even require your tenants to get renters insurance to cover their belongings.
- Another reason to require your tenants to carry a renter’s policy is their liability coverage. If, for example, a tenant invites a guest over who slips and falls on ice, the tenant should be responsible since it’s unrealistic to expect the landlord to deice each property whenever it gets cold outside. However, if the injured person suffers severe injuries and the tenant has no insurance coverage, they will look at “the next person in line.” All the person’s attorney has to do is find one “small” thing that you as the landlord could have done to prevent the accident.
- Landlord insurance doesn’t cover common maintenance and repairs such as replacing the furnace or fixing a clogged toilet.
- Just like with a standard home insurance policy, earthquake, flood, sewer back-up are excluded unless added. Click here to find out more about earthquake insurance. Click here to find out more about flood insurance.
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