Posted On: June 6, 2008, 7:59 am CDT

Posted By: underwriter

In dealing with Condo policies (HO6 form) in VA and NC, the coverage needed by the insured has varied with each association. No two are alike. True, the association needs to be concerned the preservation of property, but when do you draw the line between what is common to the building and what is specific to the unit? Market pressures in VA and NC have forced many HO Assoc.'s to place more and more financial responsibility on the shoulders of the owner, bare walls master policies are the rule more than the exception, especially in coastal regions where the wind exposure is the greatest natural peril. And judging by the lecture content in my CIC classes, where our regional ed director serves as an agent in the FL market, the same holds true there. Bottom line, it is incumbent upon the agency to properly value the exposure to the insured and not merely base Cov A by the Association's deductible.

If the association's charter seems vague then I certainly wouldn't count on the contract language to define proper coverage. Otherwise you are merely guaranteeing a closing of the claim in the court room versus between the insured and the carrier, which is the way the loss should be settled. No one is served by extending the process by litigation.

Ulitmately it's your choice. You can either choose to properly value the unit or you can choose to let your E&O carrier increase your premium rates after a few choice claims. It's wonderful that an agent has been able to be very successful for him/herself by writing this type of policy for over 20 years. But counting on vagueries in contract language for the HO-6 form valuation should have been discontinued in the mid 90's.