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The value of having an HO6, “Condo Insurance” for your New Orleans Condo is Important-Just ask Issac..

     Issac was the recent Hurricane that swept through New Orleans last week.  The tropical winds lasted about 36 hours and dumped about 10 inches of rain.  I know first hand of two condo associations in the Warehouse District that has damages to the roof and in came the water.

     You would first think that the condo association’s insurance would cover all the damage.  The problem here is that the deductibles for wind and hail are high and may not kick in until $100,000 to $200,000 of damage has occurred.  Even then it will not cover possessions and build-outs in the condos.   So the condo association has to dig into reserves to cover the roof and other damage that may have occurred.

    All lenders now require the condo buyer to have an HO6 policy just in case this happens.  It happened last week to about a dozen owners that I know of.  They generally require a 40-20 policy or more depending upon the condo and its value.  The 40k is for things like floors, cabinets, and appliances.  The 20k is for possessions.  The deductibles are lower than the master policy.  The lender will have a formula for what you need.

     The HO6 policy cost about $700 to a $1,000 per year.  Cash buyers are not required to get the insurance but they need to have to policy for peace of mind.  It is not a common occurrence but it does happen and with first hand knowledge you had better get a policy and upgrade it from time to time.

    Both instances centered around the roof leaking.  Many of the roofs in the Warehouse District are flat and that seem to be where most of the problems do occur.  But not always.  I know of one several years ago where a water pipe burst after a transformer exploded.  The shock busted the water pipe and after 10 minutes of running it left several units damaged.  It does not take a busted pipe long to ruin things.  This does not happen often but it does happen…..

    So if you do not have your own condo insurance policy, then you need to get one or roll the dice.  If you have one it may be time to review it and check it out. 

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Eric Bouler Realtor
Gardner Realtors
Metairie - New Orleans, La. USA