Tuesday, June 30, 2009

Condo owners in Florida, including Aventura condos, Miami Beach condos, Sunny Isles Beach Hallandale condos

Owners of a condo or a townhouse with condo associations, take note re: HO-6 “WALLS IN” INSURANCE

This just in from Michele J. Baena, Senior Home Mortgage Consultant,
Florida Home Finance Group, LLC, An Affiliate Of Wells Fargo Home Mortgage….

As of July 1, borrowers must obtain Homeowners - 6 (HO-6) “walls-in” insurance for all condominium projects with attached units. Most borrowers will not be familiar with walls-in insurance requirements or will think their monthly association dues cover the needed insurance.

Typically, Condominium Associations do not insure the interior of the condo unit. It is the responsibility of the condo owner to properly insure interior improvements, such as: kitchen cabinetry, bathroom or lighting fixtures, upgraded flooring, extensive sound systems and appliances.

Insurance Requirements:

Walls-in coverage is required for all improvements and betterments within the condo unit. In most instances, coverage is provided by a separate, borrower-maintained and borrower-provided HO-6 policy (or comparable policy).

The amount of coverage is determined by the borrower’s hazard insurance provider.
The policy must indicate that claims (settlements) for damage to the unit will be paid on a replacement-cost basis.
The maximum deductible allowed is 5%.

NOTE: If a Condominium Association’s master insurance policy provides walls-in unit coverage, the borrower does not need to obtain insurance (see next section). The master policy must include replacement coverage of improvements and betterments the borrower makes on the unit.

If a borrower disputes the need for their individual borrower-provided HO-6 policy because they believe their Condo Association’s master insurance policy covers their individual unit, they can follow up with their Condo Association, Property Manager, REALTOR or builder to verify coverage is included in their master policy. If the borrower is informed coverage is provided, they will need to obtain:

Declaration (of Condominium, CC&Rs, or Master Deed)
Articles of Incorporation
Recorded Condo Plan/Plat/Survey Map
All applicable recorded/executed items

It will then have to be submitted for verification. michele.baena@floridahomefinancegroup.com, www.homeloans.com/michele-baena APPLY ON LINE

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