The Most Overlooked Type of Insurance for Rental Condos

Do you have a rental condo that you have an individual share in? One item that you might not be aware of is what happens when the monetary reserves for any damage to the property can not cover the full cost of repair. When this happens, it falls on all those who have investments in the property to cover the share of the costs. This is where the most overlooked type of insurance for rental condos will make an enormous difference. Today with the help of Innovative Properties, a property management company in Annapolis, we can take a closer look so that you are covered.

Assessment Fees

There are two different ways that you may incur extra fees from your Homeowner’s Association (HOA):

• Special Assessment – this occurs when the HOA determines they don’t have enough money to pay for things such as the new swimming pool, parking lot repairs, or repainting the buildings, for example. In order to cover these costs, there is a special assessment charged besides the normal monthly fees to help pay for everything.
• Loss Assessment – this occurs when there is a loss from damage. An example would be a hailstorm that destroys a roof or breaks many windows, for example.

Protecting Yourself and Your Wallet

How can you avoid potential unexpected fees from a loss? Well, you should contact your insurance agent or provider and see if you have something called a HO-6 Policy. This is solely for HOA townhomes, not single family. With this policy you will be covered against those loss assessments.

These policies do vary from insurance providers so when you are getting set with this policy you should ask:

• What is my deductible?

If you have a high deductible than the policy won’t do much good for saving money when a loss assessment occurs.

• What is the amount of coverage?

The typical coverage is around $1,000, which again doesn’t do much for any higher cost damage events. Make sure you determine what the maximum amount of coverage can be and if it makes sense then take it all the way to the maximum if you can.

Thanks for reading over the most overlooked type of insurance for rental condos.

About Innovative Properties

Innovative Properties is a property management company in Anne Arundel County focused on helping residential, commercial, & HOA property clients. With over 30 years of experience in property management and leasing, we can help you rent, sell, or buy your next property in Anne Arundel County.