Condo Insurance: Protect What’s Most Important To You

What is Condo Insurance?  

Condo insurance covers everything, from your unit’s walls and flooring to your possessions.

With housing prices continuing to rise all over the US, buying a condominium might be more feasible than buying a single-family home. Have you taken the plunge and bought a condo recently? According to the Community Associations Institute, about 25-27% of U.S. citizens were living in a community association (homeowner’s associations, condo communities, etc.) in 2019. Out of that, around 35-40% were living in condominium communities.

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Just like if you bought a single-family home and needed to buy homeowners insurance, it’s important to have condo insurance aka HO-6 insurance. When you buy a condo, you don’t own the building or the land, but you do own your unit and it’s important that your unit and belonging are protected.

Most people think this policy is the same as homeowners insurance, but it has a few differences.

Condo Insurance vs. Homeowners Insurance  

When you buy a home, you are purchasing the entire plot of land, including the building, fences, garage, and yard. You’ll be responsible for all of them and your belongings as well. Your homeowners insurance is designed so that all of your property is included in the policy.

When you own a condo, you don’t own the building. You only own the unit you live in, which also includes the unit’s outermost walls. Your condo home insurance will cover your property and your unit, but nothing else.

For example, a fire destroys your garden. Since you do not own the backyard, your condo association, or homeowners association (HOA), will take care of the expenses through their master policy on the building. Whereas, if this same situation was to occur in a single-family home, homeowners insurance would take care of the expenses.

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Find Out Which Insurance Policy Your HOA Has 

The master policy is more commonly known as HOA insurance. While your condo insurance coverage takes care of everything in your unit, a master policy covers everything outside of it. It includes the stairs, walls, amenities, and covers injuries and losses to guests in common areas. For example, if your guest slips and falls into the swimming pool and fractures their leg, HOA insurance will cover their medical payments and expenses.

It’s important that you ask your HOA which type of insurance policy they have, so you can purchase your condo insurance coverage accordingly. There are two types of master policies:

  • Bare walls-in: Covers the structure of the condo walls like the wiring, framing, and the walls themselves.
  • All-in: It covers everything that came built-in with your condo walls such as, fixtures, sinks, built-in bookshelves, etc.
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What Does Condo Insurance Cover?  

While your HOA insurance may cover all the property outside of your unit, it is not enough. More often than not, your HOA and mortgage lender will require you to get condo insurance. Condo owners insurance is not a luxury, but a necessity. Let’s look at HO-6 insurance and its coverages:

Interior Walls

Your condo insurance covers your dwelling’s interior walls. If your HOA provides an all-in master policy, you won’t need condo dwelling coverage. However, if your HOA provides only bare walls-in coverage, then you’ll benefit from dwelling coverage. Your dwelling and belongings are covered from all named perils.

Suppose your condo catches fire, and your walls and built-in shelves are damaged. Your condo dwelling coverage will pay for the repairs.

Liability and Medical Bills

You have coverage in the event of unexpected medical or liability expenses from third parties. For example, a guest trips on your rug and falls headfirst into your glass table, becoming injured. Your policy’s coverage limit will cover their medical bills. The same goes for any liability expenses if they decide to sue you.

Personal Property

Personal property coverage will cover your belongings such as appliances, furniture, jewelry, art collection, expensive collectibles, and other possessions from named perils such as theft and fire. Suppose your condo is broken into, and your television and gaming system are stolen. Your personal property coverage will either pay you back the cash value or replace your stolen goods.

Loss of Use and Additional Living Expenses

If your unit suffers damage due to named perils, additional living expenses coverage will cover the cost of your hotel bills. Suppose, a massive hailstorm occurs causing lots of damage and smashing your windows. The building needs some repairs, and you are now temporarily homeless. You’ll need to stay at a hotel until your condo is fit to live in again. In this case, your condo insurance will cover your hotel bills.


Increase Your Coverage Limits as Needed 

Sometimes your standard condo insurance policy may not be tailored exactly the way you want it. You may need to protect your jewelry collection for $10,000, but your insurance may only cover it for $5,000. You’re able to get additional coverage on your collection for theft through a rider, or an endorsement. This increased coverage comes at an additional cost.  

What is Excluded in Condo Insurance? 

Even the broadest forms of insurance have a set of exclusions. Condo insurance is no different. Here are some of the exclusions you can expect to see when you purchase condo insurance:

  • Earthquakes, landslides, mudslides, flooding, and volcanic activities
  • Water damage due to surface water, tidal waves, tsunami, etc.
  • Ordinance of law
  • War
  • Nuclear hazard
  • Power failure
  • Intentional loss

Find an agent near you and start your insurance journey today!

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