Total Loss Condo Insurance In Thailand?

[Jomtienwow]

After seeing all the newly homeless people in America, and considering that so many expats buy their condos for cash, I was wondering is there anything expats can do to protect their investments from total losses, like fires, floods, explosions, plagues, and locusts?

I know you can buy theft and water damage for inside your unit, but what if your building burns down, or is condemned and torn down?

Is there coverage available to buy against this? I have never heard of it being available in Thailand, so that's why I'm asking.

If it really isn't available, I suppose its another reason to rent rather than buy, given that some people are spending 10 million baht on condos. Losing that much might be very painful even for wealthier expats.

Edited September 7, 2005 by Jomtienwow

[charles]

I think the juristic person (i.e. the condo management) would take out insurance to cover such as the building burning down rather than the unit owners on an individual basis. Whether all places actually do this is another question although the "reputable" places certainly do, for example if you buy a condo off LPN there is a seperate clause in the purchase contract on requiring all unit holders to each pay a small amount toward the building insurance (on top of their regular maintenance fees).

Edited September 8, 2005 by charles

[Jomtienwow]

That's interesting and the first I ever heard of it.

Forgive my cynicism, but do you think such coverage is for real?

I assume if it does exist that it would be for the value of the condo new, not a later possibly higher market value?

[Firefan]

You CAN obtain such an insurance - a friend of mine is currently checking for the both of us.

Building also have a general insurance you can ask the building manager to see. Problem is that it is insured as a complete lumpsum wherefore it would have to be shared with all owners which INCLUDE the common areas/swimming pool/structure/piping Etc. so one can not just divide the insurance with number of condos (or sqm).

Also; as most buildings simply insure according to their rules (or the law?) they do not follow the market increases very well. I.e. a condo now valued at 10M might only get 3M from the insurance should the building burn down. Just enough for a decent 1 bed room when moving to Pattaya...

I can give you some more info when my friend gets back to me but most insurance companies have them (called condo-insurance or something).

Cheers!

[gogreen]

Anyone have any information on condo insurance (they have this type of insurance already or they have inquired about getting it)?

- Which insurance companies provide it?

- How much it generally costs.

- What kind of coverage they offer?

- How they assess and pay out claims.

[Gary A]

My condo association pays for the insurance on the building. It is part of the monthly maintenance fee. It also includes water damage in case the roof or the condo above you has a problem.

Edited June 18, 2006 by Gary A

[Sulaphat]

The condominium juristic person would normally insure the building and common areas under a fire insurance policy or an industrial "all-risks" policy. The charge for this insurance is sometimes included in the monthly service fee paid to the condo juristic person, or alternatively paid once a year as a separate item for which you would receive a separate invoice for your allocated share.

It is quite common for the condo juristic person to insure the building for the same amount year after year, often using the original cost to build. This overlooks the fact that replacement costs increase with inflation and other factors. If the condo is more than a few years old, the value should be indexed up to reflect current replacement costs. Few condo juristic entities do this, however.

Since even partial losses are subject to potential penalties for underinsuring, this can cause problems even if the claim amount is lower than the sum insured shown on the policy declaration page. It is worthwhile getting this sorted out with the condo association and getting the sums insured updated. The cost of the additional premium is usually insignificant, especially when compared to the consequences of an underinsured loss.

You should also look at what the condo juristic person defines as the building. In most cases it means the shell and the plumbing and some wiring, but not any improvements to the shell of the unit. The improvements to the shell of the unit would then be considered the property of the owner, and thus fall outside the coverage the condo juristic person's insurance coverage.

The owner may need to take this into account when purchasing insurance and include the value of the improvements and fixtures in their sum insured. This is often overlooked, especially if a condo is purchased already fitted out.

There are many insurers in Thailand that can provide appropriate insurance for either a condominium juristic person or for the individual owner. Your best bet is to find a competent insurance broker and ask them for assistance. Let me know by PM and I can provide a couple of names of insurers and/or insurance brokers that should be able to help.