HOA vs. Condo Insurance

 Hi all,

I have a newbie type question about HOA fees.  I live in San Francisco,
and my wife and I are looking at purchasing a condo in the next year or
so.  The places we are looking at have HOA fees that range from
$250-600 per month.  Apparently, they cover insurance of some type, but
I'm sure we still need our own condo insurance policy.  As a rule of
thumb, I've heard homeowners insurance is roughly .5% of your total
appraised value per year.  On a $800K condo in San Francisco that's $4k
per year.  Factor in the HOA fees and mortgage, and this is a small
fortune to pay monthly.  My question is this: how much is condo
insurance on a place that already has blanket HOA coverage?  Is it more
like typical renters insurance ($300 per year), or is it as high as
homeowners insurance ($3k per year).  Thanks for your help.

Lance

  lance99 wrote:

In general, the HOA insurance covers exterior and framework. You only
have to insure the interior. It should be closer to renter's insurance
$300. But you'll have to ask the HOA to confirm what coverage they have.

 "I've heard homeowners insurance is roughly .5% of your total
appraised value per year. "

That would be $1500 on a $300,000 home, which is way out of line.  The
actual cost should be more like $500.  As for insurance on a condo, as
Lance pointed out, your responsibility in general is for the interior
and the contents, not the structure itself, which is covered by a
policy hopefully maintained by the association.  And I would think for
a $800K condo it would run $300-500 per year.

 

I'd suggest a 3rd kind of insurance -- an umbrella policy.
The liability on these insurances is kind of low.  For between
$100 and $200 a year, you can crank that up to a million dollars.
So, of the piano teacher slips on your steps, breaks her back,
and cannot work again, the umbrella policy should prevent you
from losing your house.

-john-

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John A. Weeks III           952-432-2708            john@johnweeks.com
Newave Communications                         http://www.johnweeks.com
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 "I'd suggest a 3rd kind of insurance -- an umbrella policy.
The liability on these insurances is kind of low.  For between
$100 and $200 a year, you can crank that up to a million dollars.
So, of the piano teacher slips on your steps, breaks her back,
and cannot work again, the umbrella policy should prevent you
from losing your house. "

Good idea, after you have the regular house insurance or condo
insurance.