Home & Condo Insurance
You’d be surprised at how many people neglect to insure their investment when they own a home or condo in Mexico. Think about it. In the United States, it is nearly unheard of for homeowners to go without insurance, and yet in Mexico, because it isn’t required by law, or there may not be a mortgage, many folks overlook it and therefore leave themselves vulnerable to tragic circumstances.
Don’t let yourself become a victim of theft, fire, civil liability, or severe weather. Annual insurance rates in Mexico are inexpensive by American standards, and so for a relatively small amount you can have a much greater level of security.
TIPS FOR HOME & CONDO OWNERS
Buy building/structural coverage even if you own a condo
Just because you pay HOA dues and part of that goes for a Master insurance policy for your condo resort, don’t assume that means your individual policy should cover contents only. Think about this:
The Master Policy for your resort covers everything that is ‘common area’. That obviously doesn’t include the interior of your unit. We recommend that you purchase a certain amount of building/structural coverage for your individual unit, say $50,000. That way, if you have a loss, you won’t have to pay out of pocket for repairs to your interior walls, ceilings or floors.
Even if your resort policy covered your interior (trust me, it doesn’t), the deductible is based on the total insured amount. Well 1% of several million is a pretty high deductible, so we recommend you insure the interior structure of your condo to be on the safe side. Some of our home policies are no-deductible policies, so you can’t go wrong.
NOTE: As I’ve mentioned in the opening statement, many of your neighbors have no insurance. If the condo above you is uninsured and has a water leak that damages your ceiling, you’ll pay for repairs out of pocket unless you have building/structural coverage!
Buy theft coverage for a house, not necessarily for a condo
It’s important to note that even if you carry insurance against theft, it will pay only if there is evidence of forcible entry.
If I owned a condo with 24-hr security, I probably wouldn’t buy theft coverage. The likelihood of someone getting past the guards, going up to my floor, busting down the door and then carrying my belongings back out again, just aren’t that great.
However, if I owned a house in Las Conchas, Cholla Bay or in town, I would insure my at least my electronic belongings and tools against theft.
While we’re on the subject, stolen copper wiring or roof-top air conditioners are not covered. You can insure contents for theft, and to be considered contents, items must be inside the rooms of your home at the time of the theft.
When calculating value of contents, consider cabinetry and other attached fixtures
When calculating the value of your contents, keep in mind that in Mexico, cabinetry, bathtubs and sinks, etc…are all considered contents and not part of the structure. If you have nice cabinetry, you might want to take that into account when estimating your replacement value for contents.
Know your deductibles
Simple enough, right? At ProAlliance Insurance, we offer two options for home/condo insurance. One provider, Mapfre Tepeyac, has no deductible on standard coverage. This is great. The only problem we have with this company is that they will no longer accept Hydro coverage on anything considered beachfront property. If you must have Hydro coverage, this isn’t the policy for you. If you opt to add Earthquake coverage, you’ll have a deductible of 2% the total insured sum and a co-pay of 20% the amount of the claim.
The other company, ACE, is a very good company and the policy is a good one, too. They, however, have a deductible on all claims. The amount of that deductible varies, depending on the total insured amount, but the minimum will be $500 dollars. On the plus side, they’ll issue Hydro coverage on beachfront properties.
EARTHQUAKE AND/OR HYDRO METEOROLOGICAL COVERAGE: Whenever I’m asked whether I recommend Earthquake or Hydro coverage, I hesitate. I don’t want to sell you something you don’t need, but I also don’t want to be the reason you didn’t fully protect yourself. The only solution then, is to give you the info and let you figure out whether you want or need it.
You should know about both Earthquake and Hydro coverage that they’re meant to be insurance in the event of ‘catastrophic’ loss. This isn’t insurance that will be of much use to you if you have minor damage.
How to calculate deductibles with ACE policies/Hydro
If you have structural coverage of $50,000, your deductible per incident will be $500 for standard claims. If there’s a broken window, the deductible will be $500.
If you have loss from a storm, the deductible is 1% of the insured sum ($500) plus 10% the amount of the loss. If the storm caused $1,000 in damage, you’d pay $500 + $50 and the insurance would pay $450.
If you have damage of $3,000, you’d pay $500 + $250 = $750 and the insurance company would pay $2,250. As you can see, the bigger the claim the gladder you’ll be that you had the coverage.
$10,000 in damage: deductible $500 + $950 = $1,450. The insurance company would pay $8,550.
How to calculate deductibles with ACE policies/Earthquake
Same as Hydro, but the deductible is 2% the insured sum and the co-pay 20% of the amount of the claim.
Know what Civil Liability Covers
This is the portion of the policy that covers injuries to others or damage to the property of others. If your place has a water leak that damages the units below yours, for example.
Windows are covered even if you don’t have Hydro
If your window or sliding door is damaged or broken by heavy winds, it doesn’t matter whether you had Hydro coverage or not. It might not be a bad time, though, to consider upgrading the windows and paying the difference yourself, since many windows don’t meet minimum safety requirements.