Ocean City Maryland Real Estate | Property Insurance

As an Ocean City Realtor and Ocean Pines Realtor I am often asked about property insurance. As with all real estate purchases, obtaining adequate property insurance will be a crucial step. Being in a coastal community we are susceptible to hurricanes, nor’ easters and flooding in addition to all of the other potential hazards that come along with home ownership. Regardless of whether it is your primary home or 2nd home real estate in Ocean City MD you want to ensure that you have adequate coverage. The type of Ocean City MD real estate that you purchase and your intended use of the property will ultimately dictate what type of coverage and policies that you will need to put in place.

Standard Home Owners Insurance

Standard Ocean City home owners insurance, also known as hazard insurance, combines various personal insurance protections including losses to ones home and its contents, liability coverage for any accidents that may occur, loss of use and subsequent living expenses and loss of personal possessions. Your standard Ocean City MD home owners insurance policy requires that one of the named insured occupies the home as a primary residence. The cost of Ocean City home owners insurance is typically determined by the costs that would be involved to rebuild the home in the event that a loss occurred and any additional insurance riders/protections that you have in place, such as flood insurance. A majority of insurance providers outside of our area, such as the one that has your primary residence policy, will not insure real estate in coastal areas. You will likely need to go with a local Ocean City MD insurance company and would be glad to assist you with this. This is also beneficial in the event that there is a problem in that they are local and are familiar with claims that arise from storms, flooding, rental damage, etc. Standard home owners insurance policies would apply to Ocean City single family homes, Ocean Pines homes, West Ocean City homes and any other properties that are not a part of a Ocean City condominium association. There are separate policies and coverages for properties lying in Ocean City condo associations, 2nd home and investment properties that you will find outlined later in this article.

Flood Insurance

Needless to say with Ocean City Maryland being bordered by the Atlantic Ocean to the East and the Assawoman Bay to the West, flood insurance is essential to have in place for a majority of Ocean City condos and Ocean City homes. Flood damage coverage is not included in your standard Ocean City MD real estate insurance policy and a separate policy is required to protect your Ocean City MD real estate investment. This insurance is typically obtained through a rider policy on the home owners insurance policy that you have in place. This makes it much easier in the event that there is a problem in that you will only have to deal with one insurance company as opposed to 2. Flood insurance costs will be dictated by the particular flood plain that the Ocean City property is and the overall design and construction of the Ocean City home or Ocean City condo.

Ocean City Condo Insurance

In a majority of situations when you buy a Ocean City condo there will be a master insurance policy in place that will cover your fire, flood, hazard and liability insurance for the building itself and all of the common areas through the Ocean City condominium association that the unit is a part of. The cost of this makes up the bulk of your Ocean City condominium fee that you see quoted on all of the Ocean City MD real estate listings. As an example, if a hurricane were to hit Ocean City MD and destroy your particular building the master policy would cover all of the costs of rebuilding the original structure and the common areas. What this policy won’t cover is your personal items, furniture and any improvements that you have made above and beyond the original build quality. The coverage for this is known as content insurance or an HO6 policy. When you purchase a condo in Ocean City MD or Ocean Pines MD you will receive a copy of the insurance policy that is in place so that we can review it and ensure that there is proper coverage to protect your investment.

Content Insurance/HO6 Policy

An HO6 policy, also known as content insurance, will cover all of your personal items such as furniture, electronics, clothes, jewelry, etc. It will also cover any improvements you have made to your property above the original construction. For example, your Ocean City condo was originally constructed with laminate countertops and you put in granite countertops and something happens to the building and it needs to be reconstructed. The master policy reconstruction that would be covered through your Ocean City condominium fee and master insurance policy would include laminate countertops; however your HO6 policy would then kick in and cover the costs associated with putting your granite countertops back in. HO6 policies can also cover any gaps in insurance coverage that may arise between the coverage a mortgage lender may require and what is in place through the master policy. Mortgage lenders typically want to see coverage in place for 80% of the appraised value of Ocean City condos and Ocean City homes. HO6 policies are relatively inexpensive considering the valuable items they cover. As with other insurances it is best to get it through the same company that has the master policy on the building.

If Your Ocean City Condo Caused the Problem

MD law now allows the Ocean City condo association to charge the condo unit owner the master insurance policy deductible in the event that their Ocean City condo caused the problem that led to the claim. For example, if a pipe breaks in your Ocean City property and subsequently floods the units below yours, you will then be responsible for paying the insurance deductible, which can be as high as $5000. There is insurance coverage for this and you will want to double check your Ocean City home owner’s coverage to ensure that you have it in place.

Rental Property Coverage

If you intend to rent your Ocean City condos or Ocean City homes you will want to ensure that you have proper insurance coverage. In the event that someone slips and falls in your Ocean City property or injures themselves in some other way the liability potion of your typical home owners insurance policy will not cover it if it is a renter. In order to have proper coverage for this in your real estate in Ocean City MD you will need to have a separate policy known as “Rental to Others” coverage. This is a relatively inexpensive policy and can be purchased as a rider to you master insurance policy.

Umbrella Liability Coverage

In the event that you have multiple Ocean City properties or extensively rent your Ocean City condos or Ocean City homes then you may want to look into an umbrella liability coverage policy. This coverage will protect you against additional legal claims after the limits on your primary liability coverage have been exceeded. In the words of long time Ocean City insurance broker Reece Cropper with IMG Insurance, “ In my opinion umbrella liability coverage is probably the single most overlooked essential coverage there is. “ This coverage is very inexpensive considering the additional coverage and peace of mind that it can provide.

Like vehicle insurance, home owners insurance coverage is likely something that you will never make a claim against, but in the event you need to it is a great thing to have. My home was struck by lightning a couple of years back and it fried my entire home theatre system. My home owners insurance coverage covered the replacement of everything and all I had to pay was the relatively small deductible. Feel free to contact me directly anytime should you have additional questions regarding property insurance or anything else concerning Ocean City MD real estate. In terms of insurance needs I highly recommend IMG Insurance and they can be reached at 410-524-5700.