Living in a condo means that you will have to abide by certain rules. You already knew this going in, though, since your HOA probably gave you an entire packet of bylaws involving noise complaints and other goodies. What most people don't realize is that this is doubly true if you have a mortgage on the condo that you now own. This is because you don't just have the HOA to deal with; it's also a matter of dealing with your lenders and their demands. In many cases, mortgage lenders will ask you to buy something called “walls-in” coverage for your home. But, what is it, and why does this type of insurance matter so much to your home's financial security? Before you write this insurance off as an unnecessary cost, you might want to know what it does and why it's so frequently requested.
What Is Walls-in Coverage for Condos?
Owning a condo means that you will have to get homeowner’s insurance, but there tends to be an issue that many insurers tend to have with condos. Since condos often have communal areas, the lines of property owners tend to be a bit blurred. It sometimes can be called “wall-to-wall condo insurance.” There are several ways to declare ownership in an insurance policy for a condo. “Walls-in” means that you have insurance on the exterior framing of your condo inward. Things like appliances, upgrades, and exterior renovations are not covered in this type of insurance. This is not to be confused with “bare walls-in,” which is coverage that involves communal areas of the condo as well as the structure of the condo. That is more of a structural insurance style that your HOA will enroll in, rather than something for you.
Is Walls-in Coverage Worth It?
Having walls-in coverage gives you a ton of peHaving walls-in coverage gives you a ton of peace of mind, and not just because it’s a requirement for mortgage brokers. The truth is that walls-in coverage is the only way to ensure that your condo is financially protected in the event of a major storm, flood, or fire. While most condos have some level of insurance on the structure of the buildings not all do. It's safe to say that they’re limited on individual coverage. Getting your policy is the only way to fill the gaps when it comes to things like appliances or personal belongings. Imagine what would happen if you ended up having a fire. Sure, your condo might be covered, but all your possessions would be gone. You'd have to build up from the bottom! That alone makes walls-in a must.ace of mind, and not just because it’s a requirement for mortgage brokers.
How To Tell if Your Condo Hoa Has a Walls-in Policy
If you have to file a claim about a loss in your condo, you need to contact both your insurer as well as the HOA. In most cases, the HOA’s policy will take care of the “nuts and bolts” while your policy fills the gap. At times, the two insurance companies may do some arbitration to determine who will be responsible for what. While most condo HOAs have their walls-in policy to help protect the overall value of the building, the truth is that not all do. Thankfully, most condo owners will find out before they buy. It should be written in your condo’s bylaws packet that came with your home. If you are still at a loss, ask!