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If you’re buying a co-op or a condo in New York City, you also need to plan on buying co-op or condo insurance—so it’s a good idea to budget for that cost. (Your building will have a master insurance policy, but that only covers the concrete shell of your apartment and common spaces.)
While of course it’s prudent to get co-op or condo insurance, it’s also often a requirement of your building or your mortgage lender. In fact, mortgage lenders tend to be more strict than buildings; they often require condo owners, for instance, to insure the interior structure—walls, floors, built-in renovations—for at least 20 percent of the loan.
The cost of co-op vs. condo insurance in NYC
There’s not much difference in the cost or the specifics of co-op or condo insurance in New York City.
“The prices are the same and the contracts are virtually identical, too,” says Jeffrey Schneider, president of Gotham Brokerage.
Degrees of coverage
For the most bare-bones coverage, prices start at about $350 per year.
“A basic policy for $300 to $400 or so would cover $25,000 of contents, $20,000 for the walls and floors, and $100,000 of third-party liability. Exact pricing varies by location, credit score, and underwriter approval,” Schneider says.
Liability insurance covers events like someone tripping on a rug and being injured in your apartment, a neighbor who gets bitten by your dog, or, more commonly, water damage to someone else’s property from your overflowing tub, washing machine or toilet.
Most basic co-op and condo insurance policies come with $100,000 worth of liability coverage. While that’s not chump change, paying an additional $70 more a year will buy you $1 million in coverage, so it’s probably worth it to be safe rather than sorry.
Considering that it costs at least $250 per square foot to rebuild an average NYC apartment, you could use up the allowance of basic coverage pretty quickly in the event of extensive water or fire damage. A policy that costs $450 to $600 a year will cover up to $50,000 of your contents, $50,000 for walls and floors, and offers $300,000 in liability coverage.
If you’re buying an apartment in the mid-six-figures or higher, you’ll probably want to spend more. Insuring a 1,100-square-foot prewar apartment worth $1 million would cost around $1,100 to $2,400 annually—depending on location and expansiveness of policy terms—with $100,000 contents coverage, $300,000 walls-and-floors coverage, and $1 million liability coverage.
Factors that affect the price you will pay
Insurance rates in NYC are similar to those in other markets around the country, although Schneider reports that local rates are seeing an uptick as a result of aging infrastructure.
“We have lots of old pipes bursting,” says Schneider, noting that water damage is one of the firm’s most common claims. Click here for the top three claims.
How much coverage you want is a significant factor in how much you will pay, but it’s not the only one. Other variables that impact your cost include zip code, building construction, and your insurance score, the last one being an assessment of your risk based on prior claim activity and your credit score.
Another one to think about: Your proximity to water—as in, a shoreline. (Think: flooding due to the elements.)
“Crime rates do not have a huge impact. But if you have a location by the water, you often cannot get standard coverage,” he says. In that event, your insurance agent may be able to find coverage from a small number of carriers that insure properties in flood zones.
Some factors that can work in your favor to help you get the best rate include having sprinkler and alarm systems, living in a doorman building (where someone is on site monitoring comings and goings), and phone-based security apps or systems like Nest. (Anything that adds an additional level of security or reduces risk is in your favor.) Click here for additional ways to make sure you get the best rate.
Keep in mind that you may need to pay more to insure certain items or equipment. Fine art is typically covered under general contents, but if you use professional equipment as part of your job, that should be insured separately.
Jewelry also requires a separate policy. Rates vary widely by location, but jewelry ranges from $10 to $40 per year per thousand dollars of value. Professional equipment usually requires a separate policy with separate underwriting and policy minimums that can be $250 to $800 and up. Significant art pieces should be insured separately as well.
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