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hurricane insurance

 
MayaN
(@MayaN)
Advanced Member

Sorry if this question has been asked 2 million times but when I put "hurricane insurance" into the search nothing useful came up. I read somewhere on this forum that hurricane insurance typically costs 2-5% of 80% of the home's sale price. True ? If yes, whoa! That's expensive. My husband and I really wanted to move to the VI, and yet every other day we discover what seem like insurmountable barriers or challenges, and as soon as we figure out how to just accept or solve one of those many challenges (which takes weeks of researching and networking), ANOTHER major challenge to living there is brought to our attention. Not whining... it's just discouraging. We could buy a condo instead I guess but the HOA fees are so high and I'm not even sure that always includes hurricane insurance. Any comments welcome, and very appreciated.

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Topic starter Posted : October 6, 2016 2:28 am
Alana33
(@alana33)
Expert

It depends on the value of your house, the construction, overhangs, age, condition, whether it has storm shutters/type shutters, whether you're only insuring for structure for earthquake/windstorm, only or including contents, additional property structures, liability, etc.
You typically need to insure for 80% of the value of property.

Flood Insurance is a separate if you're in a low lying area/flood zone.
It won't be covered under a homeowner policy.

Wood structures are more expensive to insure.

If you purchase a home thru a bank, they often will include additional fees to include insurance. It depends on your situation and what you're buying.
If you're not putting down 20%, then you have to do PMI.
http://www.bankrate.com/finance/mortgages/the-basics-of-private-mortgage-insurance-pmi.aspx

Some condos include insurance in their HOA fees as well as some utilities.
If you're buying a condo, request a copy of by laws, rules and regulations and a financial statement regarding the reserves they have on hand.
The reserve is for damages to exterior.

You must have your own insurance for interior/personal property loss.
You should also ask if they're planning any present or upcoming upgrades to property which will increase and be included in your HOA fees.

Depending on the condo association and whether they are self insured,
the ratio of owner occupied vs rentals units, you'll have to pay cash as you won't qualify for a mortgage loan, no matter your credit score, equity, etc.

I pay my own homeowners insurance and property taxes but I own a home not a condo.

You want those bills to come to you, directly, and have receipts and proof of payment in the event of a mistake on the part of whatever entity you're dealing with. It happens.

I gotta say, I have a home here, just bought one in FL and the windstorm/homeowners insurance there was 1/6 of what I pay here, annually.

Of course, that could dramatically change after Hurricane Matthew
slams into FL.

It sure did after Hurricane HUGO and got even higher after MARILYN!

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Posted : October 6, 2016 4:02 am
Scubadoo
(@Scubadoo)
Trusted Member

It may be under windstorm insurance, that's how it's written in the policies.

I don't know the numbers as I have a condo but I'd expect it to be expensive. The risk is high, we're right in the middle of the hurricane belt. Condo HOA fees need to cover insurance for the common areas but you typically also need insurance for the interior of the unit unless in the unlikely case the HOA covers that as well.

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Posted : October 6, 2016 4:06 am
MayaN
(@MayaN)
Advanced Member

It may be under windstorm insurance, that's how it's written in the policies.

I don't know the numbers as I have a condo but I'd expect it to be expensive. The risk is high, we're right in the middle of the hurricane belt. Condo HOA fees need to cover insurance for the common areas but you typically also need insurance for the interior of the unit unless in the unlikely case the HOA covers that as well.

Thank you! So when you say you typically also need ins. for the interior of the condo unit, do you mean that it's a wise idea, or do you mean that it'd be required in order to get a mortgage on the condo?

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Topic starter Posted : October 6, 2016 4:34 am
MayaN
(@MayaN)
Advanced Member

You should also ask if they're planning any present or upcoming upgrades to property which will increase and be included in your HOA fees.

Depending on the condo association and whether they are self insured,
the ratio of owner occupied vs rentals units, you'll have to pay cash as you won't qualify for a mortgage loan, no matter your credit score, equity, etc.

Thanks for all the detailed info, Alana! I understood it all, except for the parts I put in quotes. Do you mean that if they upgrade the property after we purchase our unit, our HOA fees would go up? Would there be some kind of cap on that or can HOA fees just keep going up and up? Also, sounds like you're saying that some condos are not buyable with a mortgage and those would require cash pay? Is that the majority of condos? Are there some condo developments that do not allow (or limit) the number of rental units, meaning they are all or mostly owner occupied? Just wondering if buying a condo is a good option for a couple like us who would be planning to live there year round... wondering how weird/annoying (or not) it'd be, seeing renters come and go from other units. Guess you can tell we've never lived in a condo, only houses and mainland-style apartment complexes.

Last question, at the risk of asking too many. Here in Vegas, when you rent a residential apartment, you sign a lease (typically 1-2 years) and after that, almost always, the rent is raised a bit (or a lot) and then you opt (or not) to sign another lease. I just assumed it was like that everywhere, but my husband said he read something online about it being unlawful in the VI, for landlords to raise the rent on tenants who maintain continuous occupancy of the same rental unit . I'm just sure he must have misunderstood something, because if he didn't, well that's the first piece of GOOD news I've heard about housing in the VI, ha ha. I've heard of "rent control" in areas like NYC or San Francisco, but I certainly didn't think that'd be the case in the VI! Many thanks if you can clarify.

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Topic starter Posted : October 6, 2016 5:17 am
Gator's Mom
(@gators_mom)
Trusted Member

These are a handful of condo associations where homeowners insurance is not part of the HOA. It would be difficult to get a mortgage if this is the case - but there are many condo associations that do have insurance. Condo associations work hard to try to keep HOAs within reason and special assessments under control.

When Alana compares her inland property in FL to any island property it's apples to oranges. I live close (1,000 feet) to open water in FL and my insurance is about the same as for my VI property though in FL it includes flood insurance. The two single-family homes are similarly valued.

I have owned two condos in FL - each condo association has it's own way of doing business. Most VI realtors can answer your questions about ownership vs rental units in a complex - it varies. Some condo associations are quite focused on owners living in their units while others are not.

There is no standard long-term residential lease in the VI. When initially signing a lease, you may add in a clause that dictates increases upon renewal after the first year. Chances are you'll be negotiating with the property owner.

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Posted : October 6, 2016 10:31 am
Alana33
(@alana33)
Expert

Yes. HOA fees would go up if say, they decided to paint all the buildings but the increase would not be permanent but to cover whatever project they're implementing and could run for a year or 2.
They don't increase, hugely, generally and the increase is to cover a particular project. It's called a special assessment.

The appeal of condo living for many is that you dont have to deal with exterior maintenance, grounds keeping issues, etc., as you would for residential properties.

I'd imagine that living in a condo would be similar to living in an apt. complex as far as people coming and going.

I should have said that there are some condo associations that don't qualify for a mortgage loan.

I'm not aware of it being "unlawful in the VI, for landlords to raise the rent on tenants who maintain continuous occupancy of the same rental unit."
Nor of rent control in the VI.

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Posted : October 6, 2016 12:39 pm
Scubadoo
(@Scubadoo)
Trusted Member

Unless a condo HOA happens to cover insurance for the inside of the individual units the homeowner should be getting the dwelling policy which should cover liability as well as damage. Windstorm and flood coverage for the interior would be additional to that base insurance. Don't think you would need flood coverage for an upper level unit or outside of a flood zone. Typically the HOA insurance will only cover the common elements and you would be responsible for most everything inside the walls including the dwelling itself and furnishings/personal contents. Your liability insurance would cover not only personal injury but also damages to other units or common elements caused by your unit or it's occupants. For example, your dishwasher floods the unit below yours.

Some HOAs have restrictions on rentals, could be no rental at all or only long term or minimum number of days for rental.

HOAs that are run well will be planning budgets to cover routine periodic maintenance to avoid raising monthly fees including expenses required every few years. Special assessments for a predetermined duration may be used from time to time to fund capital improvements or major repairs. These items are typically approved by vote of all the owners as defined in the bylaws. HOAs typically try to keep the fees competitive with other similar complexes to help with resale value. All of these financial details including several years history and bylaws should be made available to potential buyers through the realtor for due diligence before putting in an offer.

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Posted : October 7, 2016 1:33 am
MayaN
(@MayaN)
Advanced Member

Wow, super helpful info to know and be armed with if we do decide to move forward, thank you everyone!

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Topic starter Posted : October 7, 2016 4:40 pm
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