Home Insurance in New York>Question Details

Mr Confused, Other/Just Looking in New York, NY

Hello all, i own a coop apartment. Im looking to get rid of my property home owners insurance that i am paying for every month. in case of a fire or

Asked by Mr Confused, New York, NY Fri Feb 5, 2010

flood isnt the coop building covered which i pay for out of my monthly maintenance?

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13
Mack, this is probably why he needs that policy that he wants to cancel. As the saying goes, penny-wise and pound foolish.
1 vote Thank Flag Link Sat Feb 6, 2010
Your policy covers much more than that. If you cause damage in other uni you can be liable forthat, the coops insurance might pay but then would look to you.
It also coves your property such as Furniture, appliances, etc.
I have seen examples where the apt on a higher floor had a fire, the water damaged the unit below (or even floors below) but the tenant above had no insurance and the owner above did not either...the coop was damaged (elevator ruined $500K in damage there alone) so the coop went after the owner, she had no money, so they are taking the unit ...there is no money for other affected owners personal property, and no point in trying to getblood from a stone. So my owner paid.
Do not own in NY (or anywhere else) without insurance
0 votes Thank Flag Link Wed Feb 10, 2010
Mitchell, it is only in the last few months that I have been getting commitments for borrowers that ask for them to get an HO6 policy. I had never seen it before. They ask for them to have it, but do not escrow for it. Also, the managing agents generally give the insurance for no charge, but charge for the condo or co-op questionnaire unless the bank will accept the generic one that they have. Some also charge for the financials, which the listing agent should get from the seller up-front, according to what I learned in a seminar that I had to take with agents when I worked for another company. It always makes the agent look good when I can tell my borrower that the agent saved them money.
Also, an interesting thing that you might want to know is that one of the major co-op lenders who would not take a new questionnaire if the building is on their list is now asking for a questionnaire if it was over 30 days since they reviewed one.
The reason I mentioned about the high end buildings is because they are the ones that I find are the strictest on debt ratio. I did learn my lesson though years back when I got someone approved with a back end of over 50, but the co-op board turned them down. Now I always ask them to have their agent check.
0 votes Thank Flag Link Sun Feb 7, 2010
Robin, I sell in all price ranges although most of Manhattan is considered "luxury" but not necessarily "high end". The average price of a Manhattan apartment in Q4-2009 was $1,335,000 the median price $795,000.

Coops and condos want as little liability as possible. Some buildings recommend home owners and renters insurance while some buildings require it. I've never seen a lender require insurance other than the buildings master policy. I have seen managing agents for coops and condos charge a fee ($150-$300) for a copy of the buildings insurance policy.

Unfortunately with insurance you're "dammed if you do" and dammed if you don't" Once a purchaser is approved the coop or condo really has no way of knowing if the resident has a current policy until something occurs. If I have a flood in my apartment and it damages the apartment below me the coop or condo's policy won't cover repairs. The neighbor can sue me and or the board.

I have seen several condo sub lease applications requiring both the home owner/ landlord to have home owners insurance and the lessee to have renters insurance.


Mitchell Hall
Associate Broker
The Corcoran Group
mhall@corcoran.com
0 votes Thank Flag Link Sat Feb 6, 2010
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
Thanks, Robin, I didn't know that. Here in Seattle, lender require it on condos (we have only a few dozen co-ops).

So, I'm wondering who foots the bill if Mr Confused sets fire to his kitchen cabinets, and all the damage is in within his walls. Or if his sink clogs up and the water drips downward.
0 votes Thank Flag Link Sat Feb 6, 2010
Robin, please re-read what I wrote:

"Then speak with your lender to make sure that you have whatever coverage it may require even though you are in a coop. Just for the sake of good order."

Yes, I do know that a co-op does not require the standard homeowners policy. However, I do not know how Mr. Confused (he is by his own admission, "confused") is financing his interest in the unit. While the bank may not require insurance, as a financial expert, his lender may look at his profile and recommend that he consider term life, or other insurance that will protect him in the event of death or disability. It can't hurt to make a phone call to the person or company holding the note.
0 votes Thank Flag Link Sat Feb 6, 2010
Jenet, I wouldn't say that Tammy and Monica gave good answers, because no lender requires a person taking out a co-op loan to have their own insurance. As long as the master policy on the building has all the components that the lenders want, that is all that is necessary. Now, there is a difference between what is necessary, and what is smart. In case of a fire, the building is protected. However, Mr. Confused, wouldn't you want to be covered for what you have in your apartment, or would you rather replace it all if it is damaged by fire, flood, or if someone breaks in? Previously, lenders did not require insurance on condos. We are now seeing that many require what is called an H-06 policy, or a walls in policy for condo owners. This may happen in the future, but it is not happening now with co-ops.
Mitchell, it seems from both this answer and another one you gave on another thread, you must deal mostly with the high end buildings in Manhattan that have stricter guidelines and rules, so they don't apply to many of the buildings.
0 votes Thank Flag Link Fri Feb 5, 2010
Mr. Confused,
You need to give yourself a better name. Perhaps "Mr. Inquisitive" or "Mr. Asker of Very Good and Logical Questions." All very good answers below. Even if there weren't a requirement by the co-op board or your bank, it would just be wise to have coverage on your own apartment because the building policy would not cover the contents of your apt.

Jenet Levy
Halstead Property, LLC
jlevy@halstead.com
212 381- 4268
http://jenetlevy@halstead.com
0 votes Thank Flag Link Fri Feb 5, 2010
Just so you'll know, Mr Confused . .
You must hold on to your Home-owner's Insurance until the property changes ownership because as long as you own it, there has to be valid coverage on said property. Once it is Sold, then the new owner must get the property covered in his name. No bank will give a loan on a property if it is not current coverage. Therefore, you want to keep the insurance in place while putting the coop on the market For Sale.

If I can assist you further, please feel free to contact me via email or telephone.
Thank you for your inquiry.
Monica mkpindle4jc@yahoo.com
917.674.7487
0 votes Thank Flag Link Fri Feb 5, 2010
Dear "Mr. Confused" (interesting name :)

Please talk to your insurance carrier about what your current policy covers and doesn't.

Then speak with your lender to make sure that you have whatever coverage it may require even though you are in a coop. Just for the sake of good order.

Then chat with your co-op board rep to be sure you have the coverage it may require of you.

Once you have satisfied the required coverage, now you can decide if you can afford to replace whatever personal property you may lose if, heaven forbid, your unit catches fire, etc....

I know people who were in a fire and did not have personal property coverage (a/k/a renters insurance as you are effectively renting back your co-op) and lost EVERYTHING. This is not something I would wish on anyone. Consider hanging onto your coverage, but make sure it fits your needs.
0 votes Thank Flag Link Fri Feb 5, 2010
You should check to see if the co-op requires the insurance--consider keeping it , better safe than sorry--if you are not happy with the rate, consider shopping around, see if you can find a less costly policy.
0 votes Thank Flag Link Fri Feb 5, 2010
Many coops and condos require home owners and even renters to have their own insurance.
0 votes Thank Flag Link Fri Feb 5, 2010
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
The building has it's own insurance to cover the building, not your apartment per se'. You need insurance to protect you.
0 votes Thank Flag Link Fri Feb 5, 2010
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