Condo Fees: Includes Hazard Insurance?

Question

Looking into possibly purchasing a condo or townhouse. The condo fees are approximately 2 to 3 times more than the HOA fees for a townhouse, between the ones I was looking at.

The condo fees include water/sewage and also hazard insurance in which the HOA fees do not include.

If I purchased the condo, does that mean that I won't have to pay the "I" (insurance) part of the Principle, Interest, Tax, Insurance (PITI) because it is already included in the condo fees?

Answer 1

Yes. As far as the lender is concerned the hazard policy that the condo association carries is sufficient for their requirements (they verify the association's coverage in the underwriting process). This insurance only covers replacement cost of the structure, not the contents (which include your personal property as well as the cabinets, appliances, flooring, etc in the unit). Despite the lender not requiring it, I would still recommend you consider getting a homeowner's insurance policy to cover these items. The association policy also only covers general liability claims in common areas, not your unit (i.e. slip and fall lawsuits), which your own policy would cover.

Answer 2

There is more coverage to insurance than just hazard.
The lender who provides your loan will tell you just what kind of insurance you need , since it is a condo and not a SFR. It is the lender who actually owns the property until you pay it off , and they are the ones with the insurance requirements.

Answer 3

Maybe, but be real sure what the hazard insurance covers. It might just cover damage to the structure itself, in which case you'd still want to get coverage on your personal possessions and liability insurance.

Answer 4

yes

Answer 5

yes, I think, but not 100% sure

Answer 6

i think yes