THEFT. A very difficult policy to claims against. There are lots of restrictive clauses, it only pays out if there is a break-in, and so it often behooves people to spend their money on security - and, collectively, for an apartment complex, this makes sense. If someone wants to insure their belongings in an apartment, the starting point is an inventory list of ALL the items in the unit, with the value of each item - and makes, models, serial numbers. Budget on roughly 1.5% per year, multiplied by the total value on the list.

LIABILITY. This is important for complexes where time-sharing is customary. Costa Rica is not a litigious country, so only a small General Liability policy is advisable. It should be in the name of the condo association, and each owner should appear as a co-insured. Liability premiums are determined by INS on a case basis, depending on the risk and security involved. For example, pools and tennis courts add risk, but hand rails and non-skid floors reduce exposure. Budget on a premium of around 1% of the coverage you wish to contract. And remember that, mostly, condo are registered in the names of Costa Rican corporations which have no assets which can be attached in foreign countries, so a plan on a moderate amount of coverage.

FIRE & NATURAL DISASTERS. The main risks covered are fire, lightning, wind, hurricane, floods, landslides, 'quakes, tremors, tsunamis, and volcanoes. The rate depends on the number of floors, but budget on about 0.5% per year multiplied by the estimated cost of rebuilding - NOT on the market value of the units.

This policy must be in the name of the legal owner(s) of the property - so usually it is initially purchased by the developer, in his name. He insures as soon as he receives the units from the builder. As the developer goes selling the units, he should write letters to the insurance company, INS, asking them to segregate the respective units, and providing the name and ID numbers of the new owners, and the units' filial "folio real" numbers. When all the units are sold and have been segregated, the only parts not segregated on the policy are the common areas which are, of course, no longer really the developer's - they are common property. (How's that for stating the obvious?) So at this point the policy should be transferred into the name of the condo association, which becomes responsible for collecting from each owner their corresponding part of the premium. Prorating the premium is fairly simple - I have an Excel program which I would be happy to share - write me!

It is not unusual for people to assume that, because there is a policy covering a condo complex, it is not important to segregate the units as they are sold off. Wrong - it is super-important! If there were a claim, before paying INS would verify that the policy (or the corresponding part of a policy) and the ownership of the damaged property were the same: if they weren't, they wouldn't pay! So if you own a condo, get on the case of your condo association or - if it's brand-new - the developer's case, and make sure that your unit has been correctly recorded in your (or your corporation's) name in the National Registry, and segregated on the Fire & Natural Disaster policy.

The writer's purpose is to give you a better understanding of insurance in Costa Rica. The opinions and viewpoints are his, and do not necessarily represent the official position of the National Insurance Institute (INS). For further information see www.InsuranceCostaRica.info, call David Garrett at 233 2455, or write david@InsuranceCostaRica.info .