Condo Homeowners Insurance
Home Insurance

Understanding Condo Homeowners Insurance

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What Is Condo Insurance?

Condo insurance is also called HO-6 insurance and can actually be used to insure a unit with a co-op as well since the policies work the same. HO-6 insurance is an industry term used to signify that the coverage is for a condo, as opposed to a homeowner’s policy (HO-3) or a renter’s policy (HO-4).

Condo insurance picks up the tab to pay for coverages that an HOA policy won’t take care of, such as liability claims, or claims for damage to the inside of your unit. Condo insurance will also cover stolen belongings.

Condominiums, a popular alternative to an apartment, require condo insurance policy coverage which contains some elements that are different from either homeowners or renters insurance. Condo insurance covers only the contents and interior walls of the unit including coverage should a leak, fire, or other damage emanating from that unit affect others. It includes coverage for theft, fire vandalism, etc. but covers repairs for the interior of that unit only. The structure itself is covered by a master policy held by the Homeowner.

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When Do You Need To Have Condo Insurance?

Also known as HO-6 insurance, condo insurance is a smart—and often necessary—part of condo ownership. While a condo or homeowners association (HOA) will typically take care of insurance for common areas and the building itself, this coverage does not extend to the inside of your unit or your belongings.

This is when having condo insurance comes in handy. Condo insurance is relatively inexpensive and can cover not only property damage but a host of other situations that could be otherwise financially devastating. 

What Condo Insurance Covers?

Condo insurance covers many of the same things as homeowners insurance with the notable stipulation that only your living space inside your unit is protected in the policy. 

Here’s what else is generally covered.

  • Personal Property: This part of the policy covers your clothing, furniture, electronics, and other possessions and valuables. If you have expensive artwork or jewellery, be sure to have them appraised. You may need to purchase additional coverage to be adequately reimbursed for these items.

  • Loss of Use: Loss of use provides funds to cover alternative housing while repairs are made to your unit due to a covered peril.

  • Personal Liability: The personal liability portion of your condo insurance policy covers injury to others while in your unit. If your dog bites a guest or your child hurts another child, this part of the policy will cover you in case you are sued.

  • Medical Payments: This coverage takes care of expenses that are the result of injuries to non-resident persons while in your unit.

  • Dwelling Coverage or Building Property Coverage: You may not need this coverage if your HOA carries all-in or all-inclusive coverage, which will cover all items built into your unit including cabinets, appliances, and light fixtures as well as any improvements you make to these things.

    If your HOA doesn’t have all-inclusive coverage but something called single entity coverage, bear in mind this is almost the same as all-inclusive but doesn’t include any improvements you make to your unit. In this case, you may want to get your own dwelling coverage as well.

  • Loss Assessment: Loss assessment coverage will help you when your HOA exceeds the limits of its policy. For instance, if there was significant damage to the exterior of your condo because of a storm. In these cases, all occupants are usually asked to chip in to cover the difference. Loss assessment insurance will often cover some of all of your contributions. However, if the damage was caused by a peril NOT covered by your policy (like a flood), then you will have to pay out-of-pocket.

    Loss assessment also comes in handy if something happens in your unit that damages more than just your unit, like fire damage. If your HOA’s policy has a hefty deductible (which many do), then you could be on the hook for that amount since the damage is a result of something that happened in your unit. However, if you have loss assessment insurance, you could be spared the expense.
    Just keep in mind that loss assessment coverage is not always included in your condo insurance and even when it is included, the coverage can be quite low—around $1,000. Adding more coverage may be a good option, particularly if your HOA policy has a steep deductible. 

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What Is and Isn't Covered Under Condo Insurance?

Here’s an overview of what’s commonly covered and not covered under most condo insurance policies. 

Typically covered:

Burst pipe
Theft and vandalism
Explosion
Wind
Hail
Lightning
Fire and smoke

Typically not covered:

Damage from underground water
Wear and tear
Damage from pests
Intentional injuries to others
Earthquakes
Floods
Nuclear hazards

Condo Insurance Coverage: How Much Do You Need? And Do You Actually Need It?

Chances are, your HOA will require that you have condo insurance, even if you don’t have a mortgage that is contingent on having the coverage. 

The amount of condo insurance coverage you require depends on your assets as well as the coverage offered by your HOA’s master policy. To figure out how much coverage you need, the first review how much your HOA offers. Then, tally up your list of assets (for property insurance) and determine how much you can stand to lose if someone should sue you (liability insurance). 

Having these numbers handy should help you get a handle on how much total coverage you need. When in doubt, speak with a condo insurance policy provider so that you ensure you get the coverage you need.

We can help. Get a free condo insurance quote and we’ll match you with the best provider for your needs. 

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The Cost of Condo Insurance

Condo insurance averages around $500 per year, making it more affordable than traditional homeowners insurance—namely because the HOA policy takes the brunt of the burden.

This said, the cost of your insurance will vary depending on where you live, the insurance you require, and the amount of your deductible. For instance, condo insurance in Florida is generally three times as much as condo insurance in Utah—$964 compared to $269.

Again, you’re going to want to get a quote to get an idea of what condo insurance costs for what you want, where you live. We’ve curated a list of the best, more reliable, and affordable condo insurance providers in the country and will match you with the perfect provider for you.

Tips To Save On Condo Insurance

There are a few ways to save money on condo insurance. 

  1. Get a few quotes. This will help you get a better sense of pricing and offerings so you can select the ideal policy for your needs and budget.
  2. Raise your deductible. The higher your deductible (the amount you pay out-of-pocket before your insurance kicks in), the lower your monthly premiums.
  3. Bundle your insurance. Find a company that can bundle your condo insurance, auto insurance, health insurance, and life insurance, and any other insurance you have and you’ll save money as a reward for keeping all your coverage with one company.
Deciding If Condo Insurance Is Right for You

Even if you aren’t required to have condo insurance by an HOA or your mortgage company, it’s always wise to have at least some coverage to protect you from life’s unexpected and expensive incidents and accidents.

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FAQs
Condo Insurance covers much the same things as homeowners and renters and much like those policies, there are some things that it won't cover. Unless you have riders or buy additional coverage, most policies will not cover flood, earthquake or simple wear and tear on your property. Similar to renters insurance, the basic structure of the building is not covered by a condo insurance policy. That condo master insurance policy is held by the Homeowner.
In the event that another unit has a failure that results in damage to yours, the usual process is that your insurance will make repairs after your deductible is satisfied and seek reimbursement from the other condo owners insurer.
Home Owner’s insurance provides coverage for repairs to the basic structure. A condo owner's policy covers possessions and interior walls as well as liability for water or fire damage emanating from that unit. It covers liability within the unit but not in common areas.
Though insurance is not tax deductible, you can buy condo insurance online at some of the most competitive rates. And these policies are all designed to cover water and fire damage to both your unit and any units affected by yours.
No, but your homeowner’s association or mortgage company may require you to have it.

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