Before you look for condos or sale in Redondo Beach or Torrance condos for sale or San Pedro condos for sale or Condos for sale in Palos Verdes Estates CA, you must know about protecting your unit and yourself. This is an interview with Randy Karp of Karp Insurance Services in California regarding what you must know when you are looking to buy condos for sale.

Clara- I sell a number of condos and issues can come up once in a while. Can you give us some hints on condo insurance? What should we be looking out for?

Randy - Well, the big one is you need to know if the homeowner’s association coverage is walls in or walls out. Walls out means that you’re not gong to get any interior walls covered. You’re not going to get your kitchen rebuilt and you’re not going to get your bathrooms rebuilt. So you need to have a lot more structure coverage if that’s the case. And so that’s what - it needs to be found out from the agent of the homeowner’s association whether it’s walls in or walls out. Walls in is preferential because that’s going to cover everything. But even walls in, you have to see if it’s going to cover all the upgrades. Some units as you know are much more upgraded than others.

Clara - Right. So let’s take a look at say for example, there’s a leak in the walls. And now it has caused water to seep inside the wall. Not inside but inside the unit. How would the coverage - number one: who would cover it? Are we talking about the HOA covering it? Or are we talking about the homeowner covering it? And is it separate? I’m sure that there are two different policies. One is HOA insurance and the other one is the homeowner insurance. Can you talk to us about that

Randy - I’m seeing more and more associations want each individual condo unit to cover claims that are only associated with their unit. Typically those are water damage claims. In condos, I have a much higher rate of water damage claims then homes do. What we’ve dealt with in the past is developers using a very thin grade of copper because it’s a lot cheaper and putting it into these condo complexes. And then 20, 30 years later, there are a lot of water damage claims. So an HOA policy is not unlike a homeowner’s policy in that the insurance company doesn’t want to be hit with claim after claim after claim, and nothing being done about it. And the HOA can be looking at much more expensive policy if it gets cancelled. So the individual unit owners should have their own - what’s called and HO6 policy. The kind of policy that’s going to cover interior damage or if they accidentally cause a fire that’s going to cover their unit. And then also there’s a liability because if you’re the cause of a water loss or cause of fire, you know and you’re sitting there with half a million dollars of liability. Then you should be in pretty good shape or if you have an umbrella even better.

Clara - That’s really good to know. Something that’s been fairly recent for a few years now is airbnbs. So separate from or maybe in conjunction with, single family Homes, condos, and that type of thing. Are there any issues with insurance when a homeowner is using their home as an Air Bnb or vacation rental by owner or one of those types of rental properties? Randy - Yeah they need to get an endorsed for that. There’s a special endorsement that almost every company offers to cover an AirBnb situation. If you don’t have that, then you’re taking a big risk. The insurance company has it within their power to deny claims if you’re not telling them about an AirBnb situation. That involves a lot more risk for the insurance company. The insurance company obviously wants to know. They can only base their prices based on the assumed risk.

Clara - So now there are people out there who say for example, they have four bedrooms. They will rent out each room to a separate person. Is there any difference with that or is it still that same endorsement?

Randy - Well, if it’s AirBnb or something along those lines then they just need the one endorsement. But if you’re if you’re a homeowner and you rent out a room, that’s not a problem.

Clara - Okay. So one room is okay, but anything but if it’s an Airbnb where you have different people coming in and going out is that different? Randy - Yeah, there’s an endorsement specifically for an Airbnb, VRBO any of those.

For more questions, please feel free to contact us.

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