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HO-6 or DP1 DP2 for a rental condo

Posted: Mon Nov 12, 2018 11:23 am
by applous6
Good afternoon guys, I have a client she owns a condo and she rent it out.

what policy should I get for her? HO-6 or DP?
She doesn't have any personal property in the condo.

There is an HOA for the condo. If I go with DP should I still have the dwelling coverage? some of my friends said the dwelling is covered by HOA and I only need to put some personal property coverage on there.

Thank you very much guys :)

Re: HO-6 or DP1 DP2 for a rental condo

Posted: Tue Nov 13, 2018 11:17 am
by sankykid
I believe you would want a tenant occupied HO6. I know such a policy is offered by at least some carriers.

Re: HO-6 or DP1 DP2 for a rental condo

Posted: Tue Nov 13, 2018 12:21 pm
by mccluney
HO-6 only applies for an owner occupied residences. Need a DP3. Need to review the CCR's on the Condo Assn. As that will help determine how much dwelling coverage is needed. Interior structures, etc. stairs, fixtures and even interior walls and ceilings are rarely covered in the Assn. Policy. Need to endorse the landlord's liability on the owner's separate homeowners policy or add it to the DP3

Re: HO-6 or DP1 DP2 for a rental condo

Posted: Tue Nov 13, 2018 1:13 pm
by wariline
I've seen 2 ways carriers insuring a tenant occupied condo. Some carriers developed separate products for such situation, and called it HO9/DP9 (at least informally). Others simply use the regular HO6 form, but a "Unit occupied by tenant" endorsement needs to be added. The latter is probably more prevalent ( at least in CA). In addition, the latter is usually more expensive, and provides less relevant coverage ( Some carriers mandate certain minimum contents limit, and limit the max dwelling limit in the mean time).

As for whether or not the interior (walls-in) would be covered by the association's master policy, it depends on both the master policy itself, and the association's CC&R. Most condo master polices I've written & seen do not have any exclusion to exclude interiors - if it's part of the bldg., then it's covered under the bldg. I have never actually encountered a true "Shell" HOA master policy, but I haven't really written any condos using E&S markets. The CC&R, however, may state any interior structure that's for the exclusive use of the unit owner is the unit owner's responsibility. If that is the case, then the master policy carrier may deny claim to interiors as there would be no insurable interest.

Re: HO-6 or DP1 DP2 for a rental condo

Posted: Tue Nov 13, 2018 1:23 pm
by applous6
sankykid wrote:
Tue Nov 13, 2018 11:17 am
I believe you would want a tenant occupied HO6. I know such a policy is offered by at least some carriers.
I found a few as well, Thank you very much for your help :)_

Re: HO-6 or DP1 DP2 for a rental condo

Posted: Tue Nov 13, 2018 7:54 pm
by applous6
wariline wrote:
Tue Nov 13, 2018 1:13 pm
I've seen 2 ways carriers insuring a tenant occupied condo. Some carriers developed separate products for such situation, and called it HO9/DP9 (at least informally). Others simply use the regular HO6 form, but a "Unit occupied by tenant" endorsement needs to be added. The latter is probably more prevalent ( at least in CA). In addition, the latter is usually more expensive, and provides less relevant coverage ( Some carriers mandate certain minimum contents limit, and limit the max dwelling limit in the mean time).

As for whether or not the interior (walls-in) would be covered by the association's master policy, it depends on both the master policy itself, and the association's CC&R. Most condo master polices I've written & seen do not have any exclusion to exclude interiors - if it's part of the bldg., then it's covered under the bldg. I have never actually encountered a true "Shell" HOA master policy, but I haven't really written any condos using E&S markets. The CC&R, however, may state any interior structure that's for the exclusive use of the unit owner is the unit owner's responsibility. If that is the case, then the master policy carrier may deny claim to interiors as there would be no insurable interest.
Thank you very much for helping me. I did a few quotes with different carrier, Safeco adds the endorsement to the HO-6 and it's expensive.

what is E&S market btw?

Re: HO-6 or DP1 DP2 for a rental condo

Posted: Tue Nov 13, 2018 7:57 pm
by applous6
mccluney wrote:
Tue Nov 13, 2018 12:21 pm
HO-6 only applies for an owner occupied residences. Need a DP3. Need to review the CCR's on the Condo Assn. As that will help determine how much dwelling coverage is needed. Interior structures, etc. stairs, fixtures and even interior walls and ceilings are rarely covered in the Assn. Policy. Need to endorse the landlord's liability on the owner's separate homeowners policy or add it to the DP3
Got you, I agree with you, it's for Owner occupied, based on the quotes I have done lately, I found out actually many carriers just insure it with HO-6 but during the quoting, they ask if it's the owner occupied or not and if it's not they will add an endorsement

Re: HO-6 or DP1 DP2 for a rental condo

Posted: Fri Nov 16, 2018 3:41 pm
by monica reyes
I have an E&S market that will consider this as a tenant occupied HO6 and another that will consider this as DP1/DP3. In both situations coverage A should account for the interior additions and alterations that the HOA typically does not cover. My HO6 program will include a minimum of $1k with each policy.

You can send in an Acord application for review to monicareyes@amqts.com or feel free to call me directly if you would like to discuss further. 323-255-2333 ext. 214 :D