A Close Look at Condo Insurance

Unlike homeowners insurance, part of a condominium is "shared" property, and part of it belongs to the unit owner. Most condo associations provide a certain amount of insurance protection, which sometimes causes confusion over the condo unit owner's individual responsibility. If you, as a condo owner, are trying to evaluate how much "home" insurance you need, here are some points to ponder:

What the Association Covers. Some condo associations insure only the external building, while others assume responsibility for the building and certain fixtures inside each unit. It's a good idea to read your condo association's bylaws and/or proprietary lease to find out its insurance provisions. Once you know what your association covers, you can fill in the gaps with your own insurance. Don't forget to find out about garages, sidewalks, swimming pools, and other common areas.

Your Personal Possessions. Your personal property is your responsibility, not your association's. To estimate how much your possessions are worth, take a detailed inventory of everything you own. Keep in mind that extra coverage in the form of a floater may be necessary for especially valuable items that call for better coverage.

Condo Updates. If you have remodeled a room or made any other improvements in your condo, your policy should be updated to reflect those changes.

Loss Assessment Coverage. If your association's insurance comes up short after a disaster destroys commonly shared areas, you and other unit owners may be assessed to pay for the losses. Since loss assessment coverage pays your share of these assessments, it's important to make sure you have the right amount of protection.

Just as renters and homeowners need property and liability coverage, so do condo owners. Please call us or stop by to review your needs, and to clear up any questions you might have about condominium insurance.

Lead Poisoning Liability

Awards in lead poisoning liability lawsuits have been as high as $9 million, according to the Insurance Information Institute. Estimates run in excess of $3 billion in claims settlements during the next decade. Much of this cost is likely to be borne by landlords and housing authorities, many of whom may have lead paint on their properties and no insurance protection.

While most municipalities have long banned the use of lead paint, close to half of all dwelling units in America still contain lead paint. Approximately one-sixth of all children between the ages of one and five has high levels of lead in their bloodstream, and close to one-fifth of our nation's drinking water has unsafe levels of lead. Although still in its early stages, awareness of lead paint as a potential health hazard is rapidly growing.

The costliest lawsuit claims tend to be for young children, where plaintiffs argue that brain damage caused by lead paint potentially reduces the victim's lifetime earning power. More and more medical screening for lead content could thus trigger an increase in the number of lawsuits. "Deleading" older homes, especially those built before 1978, may be an effective solution, but it can also prove to be prohibitively expensive.

Getting Around in a Recreational Vehicle

Do you scout the rugged back country in an all-terrain vehicle? Or commune with nature from the rustic comfort of a camper trailer? As much fun as recreational vehicles can be, they come with their own set of motor vehicle insurance issues and, in many cases, there are no standard insurance coverages or ratings. Here are some of the concerns you might encounter:

• All-Terrain Vehicles (ATVs). ATVs are subject to many exclusions and limitations. Generally, racing and rentals are excluded, and so are medical payments. Comprehensive and collision coverage may require mandatory deductibles.
• Camper Trailers. All trailers require considerable skill to operate. Your personal liability is usually covered automatically if the trailer is towed by an insured passenger vehicle. However, you may want to add comprehensive or collision coverage.
• Motor Homes. Some policies insure only new vehicles, while others require a surcharge on older models. Furnishings and other personal effects are covered, but this is usually restricted to collision and fire damage, and not theft. If you lease your motor home as a means to recoup your investment, a higher rate may apply.
• Go-Carts. Despite their nickname—"midget" autos—go-carts are not covered under most passenger vehicle insurance policies. Due to the obvious potential for personal injury and property damage, they may be uninsurable for medical payments or physical damages. This is where liability insurance may be worth serious consideration.
• Snowmobiles. Most commercially built snowmobiles are insurable. But, snowmobiles used for racing or rental generally are not covered. Also, coverage may vary from state to state, and from insurer to insurer.

Recreational vehicles can be fun, but they can also pose unusual and, sometimes, severe hazards. Protect your property and personal liability before an accident or injury occurs. Give us a call and we'll be happy to discuss your needs in detail.

Is Your Home Insurance "Landlocked?"

Several important issues revolve around a home-buying decision. The town, its taxes, the neighborhood, schools, recreational facilities, shopping conveniences, property location, size, quality of construction, your commute. . .the list goes on. Insurance concerns typically come much later—perhaps after you have decided on a particular house, and are looking to close the deal.

One issue that often remains unclear is: how much of your property's total market value do you really need to insure? You might have paid, say, $350,000 for a house, of which $100,000 may be attributed to the value of the land. The land automatically is included in your buying price, but seldom do home buyers discount the price of land from coverage when contemplating the purchase of an insurance policy.

Most banks and institutions providing home loans require that the policy guarantees 100 percent of a home's replacement cost. The question is: replacement cost of what? Is it the dwelling and other structures that are on your property? Or is it everything, the land included?

As it stands, a piece of land cannot and does not need to be replaced. Even if the entire house were to burn down or get blown away by a tornado, the land would still be there. Therefore, it stands to reason that the value attached to the land itself may safely be excluded. What you really need to insure is the "replaceable" components—that is, the dwelling and other structures around it. Make sure that coverage is 100 percent of replacement cost—in other words, what it might actually cost under prevailing market conditions to replace everything from the ground up, so to speak.

Most homeowners policies do include a certain percentage of the dwelling cost, commonly between 50 and 75 percent, for contents (i.e., personal property, which includes furniture, clothing, appliances, computers, silverware, jewelry, etc.). However, limits on individual items do vary from policy to policy. It may be a good idea to review this or any other coverage on your homeowners, condo, or renters policy to see if the coverages are adequate, or if they need updating. Feel free to call or drop by if you have any questions or concerns.