The arts, the people, the skyscrapers! There’s nothing quite like living in New York City, and that’s especially true when in comes to choosing a home. Forget the white picket fence, living the dream here often means buying a co-op. In fact, a majority of the Manhattan housing inventory is comprised of co-ops, some estimate as high as 75%.
“The Rembrandt was NYC’s first co-op, opening in 1882 seeking ‘people of means and good social standing,’ as owners.”
What makes a co-op different?
Protecting your co-op investment in NYC or NJ may seem confusing. There are legal differences in terms of what you own, so the way they are insured differs too. Here’s the scoop.
- Co-ops are owned by a corporation, so when you buy a co-op apartment you’re buying shares of the corporation, you don’t actually own the building or the property. These shares entitle you to live there, which makes you more of an investor rather than an outright owner of your specific unit.
- Usually, the larger the apartment, the more shares you will have in the corporation you have bought into. In the event of a loss (such as fire), your share of ownership in the building will come into play.
What kind of insurance do I need?
A separate master policy will cover the building itself and shared areas such as hallways and elevators, paid for by the co-op association. That cost is divided among all co-op owners as part of your dues.
The insurance you need is for your personal property (like that brand new furniture) and liability (what if your dog bites someone at your party?). In addition to your personal possessions, appliances and fixtures, your NYC co-op insurance policy can cover any renovations and upgrades you make to your unit, which can be a huge investment. Your mortgage lender may also require you have your own insurance, because your ability to repair your unit after a loss protects its value.
What do I need to know about the master policy?
In a co-op, claims can sometimes involve your insurance company, your building’s insurance company, and possibly a neighbor’s insurance company. It’s important to understand where your policy intersects with the master policy to ensure there are no gaps. Ask your co-op board to see the master policy before you buy; they can vary significantly between properties. Some may not cover major perils in a cost-cutting move, others might have a high deductible that you’ll need to cover.
- Does the master policy cover water damage, and under what circumstances?
- What is the deductible?
- Is the deductible per unit, or as a whole?
- Is there a reserve fund for high deductible situations?
- Is there a limit on loss assessment?
- Does it cover flood or hurricane damage?
Don’t assume they have your best interests in mind. Just as you research mortgage rates and HOA fees, you should research your co-op’s insurance.
How do I find the right policy?
Start by working with the right agent! At Co-op Insurance, we understand the challenges co-op owners face and how your insurance needs differ from other types of property policies. (We should, we’ve been doing this for 100+ years!) We have long-term relationships with nationwide insurance carriers, which means we can shop around for you and find the best combination of coverage and cost. Our agents will work with you to make sure you have the right coverage, but in general, think about:
“In 2015 a fire department responded to a residential structure fire every 86 seconds, on average, in the United States, according to the National Fire Protection Association.”
What about the cost of co-op insurance in Manhattan, Brooklyn, or New Jersey?
Here’s the best part: at Co-Op Insurance, every request for a co-op insurance quote is reviewed by our partners – not a robot or online algorithm. They’ll pair you with a licensed insurance agent they know will match your needs. Your agent will work with you to create a customized co-op policy that fits your situation and your budget. It doesn’t have to cost a fortune, no matter if you’re in Manhattan, Jersey City or Brooklyn. Your agent is here to answer any questions you have, before, during and after you choose your policy.