I'm looking for some feedback/recommendations. If you have an investment condo, what percentage of it's market value should you have for dwelling coverage in the event of a total loss? For example, if you have a $300k condo, only the walls in are the landlord's responsibility so how much coverage would be appropriate in the event that the property is completly destroyed? 20% ($60k)?
I am an agent in a different market, but some tips I use for my clients should hold true in your area as well. Obviously you want to first check with the HOA if there is one and find out specifically what they cover and if there are deductibles in event of major loss to the buildings etc.
For insurance coverage one way is by finding out how much other owners in the development paid for recent upgrades, such as new flooring, cabinetry and counter tops. (As this is mostly what you would be paying to replace.
Another way as a very rough estimate is to cover about half the market value for interior structures (50%) So, if there's a fire, for instance, people have enough to replace their flooring, their cabinetry and their walls -- anything else would be personal property and falls under the tenants responsibility.
Hope that gives you a general idea of what to look at. Disclaimer is that this is just a general rule/estimate, so don't hold me responsible for your losses haha. I always tell people to find a local INDEPENDENT insurance agent to help. Avoid captive agents as they only have one option and product to offer you. Independent/brokers are unbiased and have access to many companies to offer you the best coverage and rates available to you.
The coverage your are describing is typically called "Betterments and Improvements". I have many investors who have these, ranging from 1 - 145 in a complex. Since the condo will usually cover the studs out, you just need to figure out how much to build out the space. Market value does not have much of an impact. BUT local contractor pricing and materials has everything to do with it.
Ask a contractor you trust how much it would cost to build out the space with "Like and Kind" materials based on the sq/ft of the unit. That should give you a pretty accurate value to place on the policy.
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