Insurance- Condominiums

Important information if you own a condominium along the shore:

Lenders must review and approve the master condominium insurance policies prior to a sale- and the same guidelines apply whether it’s a 2 unit building,  or a 60 unit complex.

According to FHA guidelines, the condominium association is required to maintain Hazard Insurance equal to 100% of the current replacement costs.  The condo buyer must obtain an HO-6 Policy for “walls in” coverage.

The master Flood Insurance coverage must be equal to the Hazard Insurance coverage (replacement costs), or up to $250,000 per unit, whichever is less.  

If the insurance coverage is not adequate, the loan will be denied.  It’s in the best interest of a condominium association to conform with industry requirements so that units can be sold- critical to maintaining real estate value.

Check with your insurance agent for additional information.