Make sure your HO6 Policy protects you – article two of three

(Second in a series of three articles from the Ad Hoc Insurance Committee)

Disclaimer: These articles are provided to assist you in understanding some of the complexities in condo insurance policies. You have the ultimate responsibility in understanding your personal insurance needs and the Association’s requirements as spelled out in the CC&Rs. The Association’s Master Property Insurance policies are listed in the annual Association Disclosure statement and online on the Members Portal. Please use these materials in consultation with your professional insurance agent/broker.

Home insurance at The Villages for Condos comes in two pieces—the Association’s Master Policy, and your personal HO6 Policy. To get your best coverage, your HO6 should fit properly with the requirements of the Association Master Policy and meet your personal needs.

Your HO6 Policy

Every condo owner is required to have an HO6 policy and provides proof of coverage each year. Please consult with your insurance professional on the best policy and coverage for your needs.

What the Villages Association currently requires to be in your policy:

• Loss Assessment in the amount of $50,000

To help you pay any “Special Assessment” from The Villages in the case of the Master Policy being inadequate to cover the Association’s losses in a major disaster.

• Personal Liability—a minimum of $300,000

To protect you from any personal liability claims.

• Personal Property coverage (the amount to be determined solely by you, the owner)

Only you can determine the value of your personal property and how much you want to insure for it. The Master Policy does not cover your personal property.

Other items you should carefully consider and get professional advice on:

Dwelling insurance coverage to cover the Betterments and Improvements you and/or previous owners have made to your condo since it was originally built, indoors or outdoors.

• The current Master Policies have limits on how much will be paid out for repair or replacement of your betterments and improvements (examples—upgraded floors, upgraded cabinets, upgraded counter tops, major bathroom improvements.)

-For most Villages, the limit is $50,000 of coverage and additional HO6 Dwelling Insurance may be advisable.

-For Del Lago, Sonata, and Fairways residents your betterments and improvements do not have a $50,000 limit on coverage.

•In all cases, a careful discussion with your insurance professional is advised.

If you are responsible for the loss event, you will be responsible for the Association’s insurance deductible (up to $50,000). Consider increasing your HO6 policy to cover this expense (typically “Dwelling” coverage, some insurance companies place this under Loss Assessment. Your insurance agent can advise you.)

• Loss of Use Coverage (When you can’t live in your condo until it has been repaired.)

• It takes months, sometimes years to finalize your claim, get new building permits, and rebuild. You should be prepared to live somewhere else, and insurance can help pay for a rental or lease of another place during that period.

• Personal Liability—Increasing the amount of Personal Liability beyond the minimum required by the Association.

-This is a good topic to get the advice of a professional.

-In addition to typical personal liability events, if you cause property damage to your neighbor’s condos, you are likely to be responsible for their damages.

• Other add-on coverages like for the high-value items (examples—jewelry, artwork, antiques, etc.)

-Basic HO6 policies have relatively low coverage limits on these items unless you provide an inventory and pay for additional coverage.

• Additional insurance policies for things like golf carts, which are not included in your HO6 policy.

There are many discounts offered by different insurance companies so look out for those to help reduce your policy costs. Some examples—Gated Community/On-site Security, Firewise Certification. Protective Devices (e.g. smoke/carbon monoxide alarms), Mature Policy owner, and Multi-Policy (with the same insurance company).

In the next article in this series, we will answer some key questions about your HO6 policy.