Buying a condo is a significant investment, and insurance is a key part of the due diligence process. Here are five questions every Colorado condo buyer should ask before signing.
1. What Does the HOA Master Policy Cover?
Ask for a copy of the HOA master policy and find out if it is “bare walls in,” “original fixtures,” or “all-in.” This determines how much individual HO-6 coverage you will need for the unit interior.
2. Are There Any Pending Special Assessments?
A recent or upcoming special assessment could signal that the HOA has had a major loss. Make sure your HO-6 includes adequate loss assessment coverage.
3. What Is the Deductible on the Master Policy?
Some HOA master policies have very high deductibles — ,000 or more. If a covered loss hits that deductible, the HOA may pass the cost to unit owners. Your individual policy should have loss assessment coverage to handle this.
4. What Are the HOA Insurance Requirements?
Many HOAs require unit owners to carry a minimum amount of individual coverage. Get this in writing before you close so your policy meets the requirement.
5. Are There Any Active Insurance Claims Against the HOA?
Active or recent claims can affect the HOA master policy availability and premiums — and potentially impact your ability to insure the unit at a reasonable cost.
An independent insurance agent can help you review HOA documents, identify gaps, and structure coverage before you commit to a purchase.