When to buy co-op insurance

Axxel,

They can provide a quote good for 30 days and renew as needed depending on closing date.

Just provide a closing date to the insurance agent. I think it is good to have the insurance policy set up (ready to go or be effective closing date) with costs and coverage known ahead of time.

Good luck with the buying process until closing!

Thanks rlr689. It is quite a process! I left quite a footprint at Staples yesterday; printed 2700 pages for the board packages! Lol.

What type of premium should I expect? The co-op is less than $200k. Personal property is only about $20k and it is not in a flood zone.

I do want liability coverage.

Axxel, I had the same situation. Called insurance co. ahead of time and set up the plan with the rep.
She had everything in order on hold and ready to go. Once I knew the exact closing date I gave her the heads up and called her right after the closing and the insurance kicked in on the spot

You should check with the Co-op Board to find out how much liability coverage they require. In my building it's now a million dollars and we have to give them a copy of the document to prove we've got it.

200-300

Geico quoted me $274. Sounds good to me but there is something I am unsure of. The "walls in" rebuilding cost coverage is $32k. Granted it's only an 800sqft apartment, it doesn't seem like very much money to rebuild my co-op should we have an entire loss. She said that's average.

The liability was $300k.

Does this seem right?

Cost to rebuild is assumed at least $150/sf in Manhattan but you aren't in Manhattan if you are paying $200k for an 800 square foot place.

Correct, it's in Riverdale. It's only $150k actually.

What would be a good cost to rebuild amount for that?

Am I correct to assume that if the building has a standard master policy, it will cover everything within my apartments walls? My policy only needs to cover from the walls out?

The building policy only covers from the walls out and any building HVAC systems.
Your policy must cover everything within the walls.

Check with the managing agent for the proprietary lease details which spell out exactly what the building is responsible for delivering/restoring after an incident of damage. It is the lease, not the coop's actual insurance policy, that governs what the corporation owes you.

It is rare for the lease to vary from the norm but best not to be caught short. Be clear especially about the bigger-ticket items like kitchen and bathroom (tile, cabinets, plumbing fixtures, etc.), light fixtures, wiring improvements, floor finishing, etc.

$32K sounds low to rebuild kitchen, bath, do floor finishing, painting, possibly plumbing branch lines, any electrical items that somehow get excluded, etc. -- I would probably look for $50K or more. Remember that you will end up buying everything new (as opposed to its current 'used' state/value), and you will be in a hurry to get it done. Be sure you understand what the agent means by 'average' -- based on construction costs per square foot, for Riverdale coops? Or is that just the average amount she sells without reference to what it would actually take to build?

Other things to consider as you buy the policy:
- coverage for alternate living arrangements while the apartment is repaired?
- coop loss assessment coverage (if a coop loss results in a pass-through assessment to shareholders, even though your unit may not be directly damaged)?

Thanks everyone.

UptownJoe: I was actually just going to ask about loss assessment coverage. How much coverage should one have with that? Seems every building will have assessments at some point. The quote I have included $10k for assessment.

$32k does sound low to me. She told me most lenders require 20% of the mortgage, which is how she arrived at $32k.

It also had loss of use at actual cost.

Loss assessment -- I think $10K is a fairly typical amount. Just to be clear, this won't cover the typical assessments (e.g. capital improvements, major repairs due to regular wear and tear, lobby or elevator upgrades, etc.) -- it will only cover damage from the same hazards as your possessions/improvements coverage, and only after the corporation's insurance is exhausted and the balance is assessed to shareholders. So it is rare to use this but helpful if you did.

Ultimately the rebuilding coverage number is up to you -- you can accept less coverage and 'self-insure' for the balance as long as your lender is satisfied. But if you have 800 sqft, figure minimum $50/ft to build, probably more like $100+/ft, even in Riverdale, plus or minus the specifics of how much the coop owes you under the proprietary lease. All of that is over $32K, though not by too much at the low end.

Verify the lease details and have the agent show you pricing for higher levels of rebuilding coverage, up to say $100,000, and take a guess at what feels right for cost vs peace of mind.

Good to know, joe. Thank you.