Insuring a condex in NH can be easy or complicated depending on a few factors. Some of these factors are highlighted below, including the type of insurance that should be purchased for a NH condex and other essential considerations.
What is a Condex?
The first hint that a condex is a bit more complex than the average home is that the word "Condex" is not defined in the Merriam-Webster Dictionary. That said, the basic understanding of the structure is that it is a condominium-style home typically with two units, like a duplex.
Many condexes were converted from a duplex, while others were constructed as a condex.
How to Insure a Condex in NH?
When a condex files as an association along with its article of condominium bylaws, it is much easier to obtain the correct insurance coverage. For insurance purposes, these documents distinguish what is owned by the condo association vs. what is owned by the unit owners.
The very principle of insurance comes down to insurable interest, meaning that you can not insure something you don't legally own. This concept seems reasonable until the lines get blurred with something like a condex because you don't own the condex; the association does. As you can not insure something you do not own, a NH Master policy in the name of the association is how to insure a condex best.
What is a Master Policy?
A master policy is typically a commercial insurance policy written for condo associations; however, it can also insure a condex. Depending on how the bylaws are written, the Master Policy can insure the building itself, including the roof, attached garages, and shared walls. It also can cover the liability stemming from shared property like the driveway and walkways.
How Much Does a NH Master Policy Cost?
Like most things, the cost of a NH Master Insurance policy depends on the building's replacement cost, where it is located (how far from a fire hydrant or fire station), and safety features like smoke detectors or alarm systems in each unit.
Who Pays for the Master Insurance Policy?
Members of the association split the cost of the master policy, which can be problematic. A benefit of a condex is there are no Homeowner Association fees, like in the typical condominium association. However, there are still shared expenses, like the master insurance premium, yard maintenance, building repair, etc.
Without by-laws, it can be challenging to force another unit owner to pay.
Will the Master Policy Cover My Personal Property?
The short answer is no. The master policy often covers the building itself and any commonly owned structures owned by the association as indicated in the bylaws. Each unit owner should then have their own NH condo insurance policy to cover parts of the building they are responsible for (as indicated in the by-laws), personal property (furniture, clothing, tv, etc.), and their own personal liability.
Can I Get a NH Homeowners Insurance to Cover my Condex?
The insurance requirement is typically up to the lender and what they will accept. This is why one condex owner may have NH homeowner's insurance, and another may have a master policy and a NH condo policy. That said, problems may not be apparent to the lender or the insurance company until there is a claim, when it may be too late to fix.
For instance, you buy a condex and provide the lender with proof of a homeowner's policy. A few months later, there is a fire that destroys the entire building. The home insurance policy taken out may NOT cover the cost to rebuild the entire building. Why? You don't own it. The association does.
This scenario is circumstantial, so impossible to say definitely how your lender and the insurance company (and your neighbor and their lender and their insurance company) may respond, but one thing is definite. It would not be quick, cheap, or easy.
Get Help Insuring Your Condex in New Hampshire
If you need help insuring a NH condex, contact the independent insurance agents at HPM Insurance. Our agents have worked with condex owners for years to cover both the association and unit owners.
