Home Owner InsuranceClient Question: “I’m buying a condo and the dues cover something called a Master Insurance Policy, do I have to get my own home owner insurance? And if so, when do I have to have it in place?”

Dear Do I Need Home Owner Insurance:

The answer to this question, like many questions we get, is it depends. However, in general, the answer is yes. If you are getting a loan to secure your condo, then the answer is definitely yes. The lender will require that you have your home owner insurance in place before they will approve the loan and close on that loan. Most people look to whomever holds their car insurance to secure their home owner insurance as a discount is typically given when you bundle your policies, but you can go with whomever you choose. You will want to have your home owner insurance in place prior to closing as your lender will order what is called the insurance binder from whomever you choose, and will need that in order to close your loan. Also, most Home Owner Associations require that each individual owner have their own insurance policy because there are limits on what is covered by the HOA’s master insurance policy.

What type of insurance you need is dependent on what type of insurance the condominium building you are buying into has. Most of the time, you will be getting what is called an HO6 policy. That means that if you flipped your condo unit over, and turned it upside down, whatever falls out would be what your insurance policy should cover. And what remains attached is often covered under the HOA’s master insurance policy.  That said, in some buildings, you have to get a policy that also covers the fixtures that are attached to the walls inside your unit as well, such as your cabinets, appliances etc. You will know which you will need once you receive the Condominium Resale Certificate and the insurance certificate will be included in that.

By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.