Buying a new condo means that you are going to have to do a lot of prep work, especially in the realm of insurance. You might have already read through the HOA insurance policy, bought up walls-in insurance for your home, and learned about additional policies you may need to take out. Of course, the biggest hurdle many deal with is the sheer amount of insurance buzzwords people hear when they’re in the condo game. One of the more common types of insurance that you may hear of is called fidelity bond insurance. It sounds pretty fancy, right? But, what does it even mean? As it turns out, fidelity bond insurance is a type of insurance that is specially geared towards a type of crime that few ever think of when they first sign on the dotted line. It's insurance that may take you by surprise.
What Is Fidelity Insurance for Condos?
When you become a member of a condo association, there’s a certain understanding that all the members need to work together to make the condo a better place. That’s why condo owners pay a fee, and that’s why condo owners tend to have a say in what the association does. Unfortunately, we live in a world where one bad apple can spoil the bunch and that includes people who work in a condominium board. That’s where fidelity bond insurance comes into play. So, what is fidelity coverage for condo associations? It’s simple: it’s insurance that protects condo owners and associates from theft and embezzlement by a fellow condo association member. Considering that embezzlement scandals often cost hundreds of thousands of dollars in terms of losses, it makes sense to ensure your condo against this crime.
How Common Is Embezzlement in Condo Associations?
It’s important to realize that embezzlement affects a condo community in profound ways. In some serious situations, it can grind maintenance into a halt, increasing maintenance fees, and even price out honest people from their condos. In some cases, it can lead to homelessness. If you are worried about hearing of your condo association members picking up and running after stealing your money, you should be. It's a devastating blow, and when it happens, it can turn a fun, quiet community into an unmitigated nightmare filled with shuttered utilities, police investigations, and lawsuits. Fidelity bond insurance is designed to protect the money raised by condo owners from theft by HOA members, past members, volunteers, as well as third parties. If it’s a white-collar crime that was committed, chances are this insurance will cover it.
Your Association Needs Fidelity Insurance
Imagine the kind of devastation that a person in an embezzled condo experiences. You’re trying to do at-home work, but the net just got shut off. You start hearing scandal after scandal breaking out. Suddenly, maintenance fees are through the roof! To make matters worse, the new community pool that everyone was looking forward to enjoying won’t be installed as the HOA promised. It’s a lot to take in, and most people rightfully feel violated by this crime. Unfortunately, there aren't always laws that require enough HOA fidelity bond insurance on a national level. However, if you want to buy a condo, there are ways to find out what kind of insurance protects your future community against white-collar crimes and major theft. Before you sign that dotted line, make sure you’re protected!