Purchasing a Co-Op - Insurance?
Hey there– we’re in contract looking to close on the purchase of our co-op. We’ve never bought before, and my suburban friends keep telling me we need title insurance… but as there’s no title where co-ops are concerned, we don’t know whether there’s the functional equivalent? We know the bank is getting some insurance on…
Hey there– we’re in contract looking to close on the purchase of our co-op. We’ve never bought before, and my suburban friends keep telling me we need title insurance… but as there’s no title where co-ops are concerned, we don’t know whether there’s the functional equivalent? We know the bank is getting some insurance on the UCC/Lien search we’re doing, but what about us? Do we need coverage? Our attorney mentioned (only after we pressed) something about an Eagle 9 policy… does anyone have this? see the need altogether? Do we need to cover ourselves and have others done the same? Thanks so much for any advice you can offer!
As stated above, the building carries it’s own property insurance policy. However, you should purchase a policy to cover your contents/personal property and improvements in the co-op. The master policy for the building really only covers the structure. Anything from your walls and in are your responsibility in the event of a loss. This coverage is very affordable and can normally be quoted in minutes. Please call my office for a quote.
Narrows Insurance Agency, Inc.
718-745-1500
as minard said, you are not buying real estate, you are buying shares in a corporation. your bank will get what it needs i wouldn’t worry too much about this. in some cases the corporation you are buying doesn’t even own the property(!), it leases it from the real owner (shares in a de-facto rental apartment). most co-ops do own the deed to the real estate in nyc (along with hefty some mortgages), but it is a little concerning when people are unaware of the extreme basics like this. on the one hand a co-op can be like an ultra exclusive country club, on the other hand it could be like buying a ball and chain attached to nothing. i think there is some nyc co ops for dummies book, seen it in B&N or such, this might be helpful in general. good luck, and congratulations on your impending purchase! i’m sure everything will be fine but read up.
In a co-op you are buying shares in a corporation, not real estate. You get title to the stock certificates, which are held by the bank until you pay off your co-op loan. You also get a proprietary lease giving you the right to occupy a certain unit if you follow the corporation’s by-laws.
What you need to get is insurance for your personal belongings (clothes, furniture) and built-ins (kitchen cabinets, appliances, bathroom fixtures). Those items are not covered by the corporation’s insurance.
You should expect to have title insurance as part of the closing costs, even though it’s a coop. Usually your bank will add this as a cost, and require it for the mortgage. You should expect this cost to be in the $300-$400 range.
So the bank “getting” insurance means you’ve got it too, that cost is passed on to you by the bank. No need to get it twice.