Protecting Home and Hearth An Insurance Overview for Homeowners

It's every homeowner's worst nightmare: you come home from work to find your apartment flooded, or your building smoldering from a kitchen fire that got out of control. After the initial trauma, there could be worse shocks in store if you're not properly insured.

Homeowner's insurance can provide peace of mind for co-op and condo owners interested in protecting the place they live and the possessions that fill it. With a wide variety of coverage options to choose from, there is a policy to fit any and all budgets, providing financial protection in the tens of thousands to the millions of dollars.

An Umbrella for a Rainy Day

Despite the importance of proper protection, a full 90 percent of co-op and condo owners are inadequately insured or have no insurance at all, according to Mackoul & Associates, an agency in Lynbrook, N.Y. specializing in co-op and condo insurance.

Unlike co-op or condo buildings - which are required to have proper insurance coverage in order to obtain loans and other financial backing - individuals are not required to have insurance when purchasing their shares or units. "You can buy a $2 million co-op, but you don't have to bring proof of insurance when you go to the closing," says Bob Mackoul, president of Mackoul & Associates. Many buildings, however, are trying to rectify this situation. "A lot of boards are pushing hard [to get people insured] without going all the way and making it mandatory," he says.

Lack of coverage also can be the result of simple confusion over whose policy covers what. Many co-op and condo owners assume that their building's insurance will cover most or all of the damage their unit might incur from a fire, flood, or other catastrophic event. This is not usually the case - a misunderstanding that leaves many homeowners at great risk.

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