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We are here as your resource to explain things, after all we like this insurance stuff.
What included in your “Walls In Policy”
So the explanation we have today is about a “Walls In Policy”, also known as a HO-6 policy. What is an HO-6 policy? That’s the insurance jargon that is associated with a “Condo/Townhome Policy”. If you are getting a condo/townhome your lender will want to verify that you are properly insured.
Who’s Responsible for What?
The question that we hear the most is: Who is responsible for what? You, the Condo Owner, would be responsible for the inside, hence the “Walls In”. On the other hand, the Condo Association/Builder is responsible for the outside.
Our whole team stepped out of the office to get a inside out look into some condos that are in various steps of the building process. We are going to walk you through the process, so now our friendly explanation comes complete with pictures. Let’s look at each phase and breakdown responsibility from there:
The Building Process:
The Big Frame Up
First thing that goes up is the framework. The studs start to divide each room and each floor. Other things that are in place at this stage include the exterior and the roof. Should a loss/claim happen at this time, the things you see now are not your responsibility. If a claim was to happen once the building is finished, the builder Condo/Townhome policy would get you back to this starting point.
Filling in the Gaps
This is where your responsibility as the owner will begin. You see the drywall going up, the molding and the railing are in the early steps. Cabinets are being set into place and what was once a skeleton is now starting to look more like livable space. Soon to follow will be the flooring carpet, hardwoods, ceramic tile giving it that home look. Your responsibility for cost are starting to add up. You as the homeowner are responsible for all of this and is all figured into you new policy as “Replacement Cost”.
Any damage that may happen to all you see in this stage is covered b your insurance policy.
What if you come home and find a water leak from your dishwasher or a pipe burst while you are at work or on vacation. You return home to water all over your floor that has been sitting there seeping in. This could be a costly repair that you would be responsible for.
While a fire will damage almost everything it touches, in lots of cases the smoke damage and water damage from the fire department can exceed the cost of damage by the fire itself. The Condo Association would only take it back to “The Big Frame Up”, ensuring the structure is sound, but you would be responsible for those “walls in”.
All Moved In
The builder is done, the movers have left. You walk into your furnished condo. The finished job will look something more like this: the ceiling are done, the recessed lighting is installed, the hanging lights are shining on the new counter tops, and all of your belonging are in their place. You are now fully responsible for everything you see in every room.
While a homeowners policy will automatically come standard with a certain percentage for your personal belongings. As the insured for a Condo/Townhome policy you get to determine the value stated under your “Personal Property”. You have flexibility to set this at a limit you are comfortable with, and adjust if need be.
Other coverage on your policy include but are not exclusive to are: Liability Coverage, Water Back Up, Scheduled Property.
Now you should be ready to make an educated decision on the amount of coverage you will need for your new Condo/Townhouse policy. If you still have question, please feel free to call and talk to us!