Eli5: how does insuring a condo work? Do you get home insurance? What happens if the roof needs to be replaced or other major repairs?

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Eli5: how does insuring a condo work? Do you get home insurance? What happens if the roof needs to be replaced or other major repairs?

In: 4

Most insurance companies have a plan called “4 walls” which insures everything in your unit. If the building needs repairs, it’s handled by the building management or home owners association.

If a major repair needs to be done the condo association may do a special assessment which means you could have to pay a lot of money in order to have a roof replaced but everyone pays into it equally.

Homeowners wouldn’t recover a roof replacement either if it is due to normal wear. A repair due to storm damage they would cover but repairs are likely to be cheaper than the deductible

You get homeowners insurance that covers the interior of your unit and it’s contents — “drywall in” is sometimes the term you hear in reference to what owner is responsible for. The condo association also has insurance that protects the common elements like roof, hallways, lobby, elevators, etc. The association also collects monthly dues and sets aside a portion into reserves for use on larger capital projects like roof replacement, elevator overhauls/replacement, exterior tuck pointing, etc.

My parents condo has an HOA, apparently they’re common in large condo complexes. A bad foundation caused a wing of the building to sink 6″ -cost a boatload of money to fix, luckily it didn’t fall completely. It’s like 12 stories.

the HOA agreement had legal language in it that said certain major repairs like that could be split among all three buildings, equally per unit. So my parents and everyone else got 40K$ tacked onto their mortgage.

The area of the building they live is what sank, but people who weren’t effected had theirs go up too. I don’t remember why the HOA insurance didn’t cover all of it – something about maintenance not being done properly.