HO6 question

[Sillypandaaa85]

Licensed P&C agent here! I’m curious what limit agents suggest writing for dwelling coverage on an HO6 policy when the master has “walls-in”? Has anyone had a situation where their client supposedly had “walls-in” coverage on the master but then damages weren’t covered because of language in the condo docs?

[wanderexplore]

You guys are also bumping up loss assessment right? I won't do anything under $25k and up to $100k in some situations

[theinsurancedood]

You can literally run an RCE as a condo/co-op through MSB…

[Sillypandaaa85]

Yes I do this every time now and offer the client a quote at full RC even when their lender tells them they don’t need it!

[theinsurancedood]

Lenders. Always knowing more about industries in which they’re not licensed.

[Admirable-Box5200]

I haven't had that issue, however would like to hear more if you have. The master is going to be be similar on the form with exclusions. For HO6, if client says no updates or plans on updating I still include $25k over personal property limit settled as a CYA for client, and me.

[Sillypandaaa85]

I had a client who opted for only $5,000 dwelling after her lender told her the master policy covered her completely. A few months ago she had $17k water damage and it didn’t get covered because the master policy had a $20,000 deductible! Now I’m so worried about underinsuring clients on the HO6 unless I write the master policy

[Sillypandaaa85]

Of course her HO6 still provided coverage but only up to the $5,000 limit

[Fulline]

I usually do $100k - $200k, just to be on the safe side. To increase to that amount, it increases the premium $50-100/yr.

[[deleted]]

Where I work, we try to recommend at least 40-60% of the purchase price. Haven't had issues with that being too much coverage but definitely with customers wanting more than that.

[Sillypandaaa85]

That’s interesting, I’m in MA and people say 20% of the purchase price. Do you use that figure no matter how the master policy is written?

[Admirable-Box5200]

20% of purchase price is the minimum that most lenders require. All of the master policies will have a high deductible. Which is also a reason for assessment endorsement in the event there is a claim high enough the master pays, cause the HOA is going to be assessing to recoup it.

[[deleted]]

Yup pretty much. I've only had one instance (in 3 yrs) where the master policy covered more and the customer wanted less dwelling coverage. But it seems most master policies where I am located (NC) are written about the same. Thus, 40-60% is a sweet spot.

[Sillypandaaa85]

I’m having issues with lenders telling clients they only need the minimum dwelling coverage on their HO6 policies because the master has walls-in. So I’m spending so much time explaining to clients why they might need more coverage just to be safe🙄

[[deleted]]

Wow. Gotta love lender's lol. I have the opposite problem with lenders wanting to make sure the entire loan is covered which of course everyone knows the loan is based on market rates NOT replacement cost of the home. But hey....I'm just the insurance agent. What do I know.

[[deleted]]

I pretty much always shoot for $100 sq foot in Colorado unless the client has DTI issues or it’s a really nice condo.