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5 Things to Know About Home Insurance in NYC

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    Hey guys, Erin Wheelock here, and I am so excited because today I will be speaking with Michael Silverman of Silver Lining Insurance Agency about the five important points that you should know when insuring your condo or co-op! And I have to tell you, these are- I’m sure he’s gonna go over and answer questions that I get all the time. So why not learn about it together?

    I’m Erin Wheelock with the Wheelock team from Keller Williams here in New York City, where we work with clients from all over the globe to either relocate here, buy a second home, or just put an investment here. Looking forward to learning with you about what Michael has to say.

    Michael, thank you so much for being here today. I am so excited to learn about these five important points when ensuring condos and co-ops here. All right, so should we get started? What is the first point?

    Well, Erin, first, thank you for having me. On behalf of everyone at Silver Lining. We’re really excited to be part of the Wheelock team. And looking forward to doing lots of insurance for many, many of your co-op and condo buyers. Well, we can’t wait too.

    Thank you. So really the number one thing that the new owner is going to look at is what do they have to ensure they have to ensure the value of the apartment. But what’s really important is that they realize that’s not the purchase price. Because in a co-op and a condo, and we’ll lump them together. Yes, there’s some different issues legally, but from an insurance standpoint is basically the same. We want to ensure what’s called improvements and betterments or additions and alterations. So basically, the co-op or condo association or board has insurance for the building. So if there was a fire, they’re going to put back the box before walls, and maybe even a kitchen, the bathrooms, etc., the basic apartment. What many people don’t realize they’re here is they need to buy walls in coverage. That’s the vernacular for a co-op or condo policy. I’m so glad you said that. I was going to ask you because I’ve always heard the term walls-in insurance.

    Right. And the reason it’s called walls-in is because you, the owner, are responsible for the wall into the apartment, the association or the board is responsible for the walls out. So very simply additions and alterations. How much money did you as the new owner spend, upgrading, improving the bathrooms, the kitchens, the floors, redoing the walls, what people forget the most is that they bought this great new apartment and the people before them did the work. So in essence, you bought the improvements. So you still have to ensure even though you didn’t spend the money, or the time doing the construction, you bought the construction. So if I bought an apartment from you and you redid the kitchen, with coriander, granite, wonderful crown molding, all these kinds of things, we need to ensure that because if there was a fire, the building’s putting back Formica countertops.

    Yes, okay… No, that makes a lot of sense. And in that insurance, are you also covering everything like your couches, TVs, all of that? Or is it really just the finishes that people should be concerned with? Well, what a great segue to section two.

    Your stuff/contents. I joke with you, I say, Okay, we insure the apartment. And then we say we have to insure your stuff, clothing, furniture, pots, pans, bed linens, TVs, iPhones, iPads, your computer, your toothbrush. If these things burn, these things get damaged from a broken pipe. We have to go out and replace. Here’s is the important part; brand new. We’re not buying a four year old or a seven year old sofa. We’re buying a new sofa. So we want to make sure that we have replacement cost coverage. That’s part two.

    Yeah. And I’m so glad that you’re saying this because I didn’t even think about the cost of the upgraded items when you’re buying them or when you’re buying a home. So interesting. All right, two very important points. And what is number three?

    So the first part is the improvements about the apartment itself and then your stuff. And and we’re not going to touch on today in this conversation is what is in the stuff, things that are not included stuff, things like jewelry, and artwork and furs and things like that, but clothing, furniture, possibly. And the thing that I always say to people, the most important thing is, yes, we’re going to insure your dresser, but we need you to open the drawers and tell us what’s inside the dressers because that can burn too.

    Number three is something called Laws of Use. If there’s a claim, and you cannot live in this fabulous new co-op or condo that you boy, you got to live somewhere. A hotel, a rental, anything. There’s some of the Laws of Use coverage. Now, some companies have $1 amount on their policies, some is unlimited to go live somewhere else for a period of time.

    So one example was a number of years ago, we had a client on the Upper West Side had a four bedroom condo; he, his wife, and his three children, and there was a broken pipe and the place was destroyed, they were out of the 19 months. Because if you think about it, there’s the damage, then they have to break it down, then they have to go to the contract and start all that process. It’s a long time, they had to rent an apartment around the corner, because they had to stay in the general vicinity, because the kids are in school. So Laws of Use coverage pays for the additional expense that you’re going to have because you cannot live in your unit.

    And just to be crystal clear, because I always thought that was just kind of connected, where something goes wrong. They’re just in a cover your stay somewhere else that that’s separate or additional.

    Well, it’s in the policy. Yes. But you have to know how much coverage you have. You might have to buy it up some policies $6,000 or $8,000 or $10,000 of coverage. Some apartments that’s less than one month in New York City today

    That’s not even gonna pay the fee to get you into that apartment. Okay, so yes, that is so important to look at that. And the problem is, people don’t think of that, because they’re in euphoria, buying this great new apartment. I’m not gonna have to move out. This is my place, this is my new home.

    And now the sad part is, it can be something that you can’t even control. It can be a broken pipe while you were on vacation. And you come back and your apartment is destroyed. But I mean, it happens and you should be prepared for it. All the time. All the time.

    That leads right into number four; Liability. Damage to someone’s property, or someone themselves. So if I come to your apartment, and I trip and fall, that’s your liability. I’m going to sue you for my injuries. That happens, but not that frequent. But it does happen.

    The number one thing that occurs in New York City co-op or condos, is you need to leave the sink running, the bathtub running, a pipe in your kitchen cracks. You’re not home. And if you’re on the ninth floor, it is raining on the people on the eighth floor caused by you. Your liability damage to someone else’s property. That’s your policy. So is it ever the building’s policy at that point?

    It can actually be a combination. It really depends on where’s the pipe? Is the pipe in the wall? Is the pipe under your kitchen sink? If it’s exposed, it’s you. Is it inside the walls? Or is it outside the walls? That’s why when we look at these kinds of positive, we always want to read the bylaws of the co-op or condo, what are their rules for these kinds of things. And we do that with and for our clients. So liability follows you wherever you go. In the apartment and outside. We’re only talking about co-ops and condos today.

    But if I have a co-op or condo apartment policy with liability insurance, and I am walking from the street and my dog bites somebody that’s my liability insurance. My apartment policy, regardless of where I am. I didn’t know that. All of these facts you’re spitting at me today, Michael, I love it. Okay, wonderful.

    The fifth item. And by the way, there are many, many more. But these are the big five.

    Something called Laws Assessment. If the building has a claim, please know if the building has a claim. And then they turn around and assess all the unit owners or the shareholders to replenish the sinking fund, et cetera. There’s coverage for that. Now, if the building decide, oh, we’re going to assess everybody $10,000 because we want to make the lobby beautiful, no. But there was damage to the roof from a storm. And we have $100,000 deductible. Yes, we have coverage. But we now have to replenish our sinking fund. We’re gonna come out and assess each unit owner, again, making it up $1,000 a month for three years or five, whatever it is. As long as it’s a claim for the building, they can, the unit owner can have what’s called the Laws Assessment coverage. That’s important. And that does not come in frequently. But a perfect example is Superstorm Sandy, which was 10 years ago, believe it or not, many buildings had claims, and many buildings assessed, the unit owners. And this was covered because it was not flood insurance.

    Wow. I had no idea about that. Because you’re right, Sandy, something that you don’t expect to happen happened. But there are other things that I’m sure come up. And just to be able to have the insurance for it? Absolutely.

    You know, I actually heard a horror story. The other day from someone there was a person who lived in an apartment, didn’t have insurance, and they tried to move themselves into their home. And they ended up breaking off part of the sprinkler when they were trying to move a couch around. It was the not funny version of Ross and Pivoting on the Friends show. I’m sure. But everybody in the building is suing them. And they had to file for bankruptcy, because they didn’t have insurance. But I mean, this just goes to show how something that seems so little can- it’s really there for the unexpected things and can help you out so much. But it’s just not something that’s always at the forefront of everyone’s mind. So I’m so glad that you brought up all these points. Because I’ll be honest, I claim to be a professional. I think I know a whole lot, especially about helping people sell and buy. But there have been times that people have brought me specific questions about the insurance. And all of these little points are just so important for the things you just don’t expect to happen that do happen.

    They do happen, and they happen all the time. And you know, you, the lawyer, the real estate attorney, or the closing agents, depending upon where you are, and we all work together for the benefit of the client. You know, I don’t know how to get to a closing. I know what they need for insurance, for the closing, you know, and if there’s a bank, frequently, the bank wants copies of insurance coverages. Sometimes they only want the buildings insurance, sometimes they want both the building and the borrower. The time that we find people not buying insurance most frequently is when there is no loan. They don’t even think oh, why do I need? Oh, I need co-op insurance coverage. Many co-ops also require liability insurance from every unit owner, regardless.

    Yeah, we see that a lot where we have to turn in the insurance policy with the board package. But you’re right, there’s definitely some times that there’s not. But this is also why it’s so important to partner with a professional company, just because they have all of the details, the facts. And one thing that I will say about you, Michael is you’re not afraid to just give the honest truth about even what they already have in terms of a policy. So if you did already go out there and buy something or you already have a policy, don’t be afraid to reach out to Silver Lining because they can even just take a look at it for you. You may have heard a point in this like I know I did, that you may not know if it’s covered or not. Or you may need to go back and read your fine print of how long and how much money they’ll cover. If something happens from upstairs into your apartment and you have to go live in an apartment for 18 months. I think everybody’s gonna be looking at their fine print and they watch this, or you should. But yeah, that’s why it’s so important to be with the right people. Thank you so much.

    I know I just learned a lot of important points from my call and I hope you did too. Of course if you have any more questions about your insurance policy or you need to get it. Please be in touch with Michael. Again. He is just such a wealth of knowledge. And of course if you were looking to make that purchase here in New York City for a condo co-op or townhouse, we are here and ready to help you.