Condo Insurance Question
I hope it's OK to resurrect this old thread.
The administrator of our condo says several condo buildings in the Sosua/Cabarete area recently decided to drop insurance coverage due to the high cost, and are "self-insuring" instead. He recommends we do the same, but this idea frightens me since a loss would be catastrophic if there were no insurance to rebuild.
In the USA, condo associations always carry insurance on the structure and common areas, and the individual owners may elect to carry insurance on the contents of their unit. In my experience, no USA lender would even consider financing a condo that doesn't have insurance. In the DR, where a lot of deals are done without mortgages, there is no lender to demand insurance coverage so it seems to be up to the owners.
I have a few questions that maybe someone on the board can answer:
- Is it customary in the DR for condo associations to carry insurance on the structure?
- If so, roughly how much does it cost (per thousand dollars insured value)?
- If the association under-insures (takes out a policy for less than the cost to rebuild) how would the insurance company calculate its liability in the event of a loss?
- If the condo association takes out no insurance, can an individual unit owner purchase insurance to cover his share of the structure?
- How difficult is it to collect on a policy from a DR insurer?
- Does anyone know of U.S. or European insurance companies that insure property in the DR?
Let's say a condo association were to self-insure by creating a pool that owners contribute to. In the first few years there would be very little money to pay for losses and the uncovered risk would be great. But after some time, the pool could become quite large. This raises a question of what happens when an owner decides to sell. Does he simply lose his contributions? Would the new buyer would be willing to pay extra to buy out the seller's share of the pool?
Appreciate your help and advice.
Ben