Condo Insurance: What You Need To Know

Condo insurance, also known as HO-6 insurance, is designed to cover what your condo association's master policy won't. It covers your personal belongings and pays out if you're found responsible for injuring someone. The average condo insurance cost is $455 per year, but this can vary depending on your location, the coverage amount, and the deductible. Condo insurance covers a range of events, from theft and fire to accidental injuries and additional living expenses if you're temporarily displaced. It's recommended to get quotes from multiple companies and understand the master policy of your condo association to ensure you have the right coverage for your unit and belongings.

Condo insurance covers your personal belongings and liability for injuries to others

Condo insurance is designed to cover what your condo association’s master policy doesn’t. A typical condo insurance policy covers your personal belongings and liability for injuries to others.

Personal Belongings

Condo insurance covers your personal belongings, including valuables such as jewelry, electronics, and artwork, but only up to certain limits. If you have expensive items, you may need to buy extra coverage. For example, if a thief breaks into your condo and steals a TV, two laptops, and a necklace, insurance would reimburse you for those losses, minus your deductible.

Liability for Injuries to Others

Condo insurance also includes liability coverage for injuries to others. For example, if a friend trips over an extension cord in your condo and breaks their wrist, your medical payments coverage could help with their doctor bills.

Additional Living Expenses

In addition to covering personal belongings and liability for injuries to others, condo insurance can also provide additional living expense coverage, sometimes known as loss-of-use coverage. This can pay for hotel bills, restaurant meals, and other expenses if you have to move out of your condo temporarily due to a covered event, such as repairs for a burst pipe.

Choosing the Right Coverage

The type and amount of condo insurance you need depend on the master policy offered by your condo association or homeowners association (HOA). It is important to understand what is covered by the master policy to determine how much and what types of condo insurance coverage you need to fill any gaps. For example, an "all-in" or "all-inclusive" master policy covers the exterior and some of the interior of the building, including attached appliances, wiring, plumbing, and carpets, but not personal belongings. On the other hand, a "bare walls" or "bare walls-in" master policy does not cover the unit's walls or your personal belongings.

To get the best price for the coverage you want, it is recommended to get quotes from multiple condo insurance companies and compare the coverage amounts and deductibles offered.

The type of master policy your HOA has will determine the condo insurance you need

As a condo owner, you own part of a building or property, but not all of it. This means that you will need two insurance policies to ensure complete protection. The first is your individual unit owner's policy, which is the insurance policy that you are responsible for as the owner of a condominium unit. The second is the master condo policy, which is held by the condo association or homeowners association (HOA).

The master condo policy covers the building structure, elevators, hallways, swimming pools, gyms, and other communal areas. It also provides liability coverage for covered accidents that occur in these common areas. However, the type of master policy your HOA has will determine the extent of the coverage.

There are a few different types of master policies:

• Bare walls coverage: This is the least comprehensive type of coverage. It includes only the exterior of the building, such as the walls, roof, and studs inside the condo. It does not cover any interior features used exclusively by the homeowner, such as cabinets, sinks, fixtures, or toilets.
• Walls-in coverage: This is the most common type of coverage and is also known as single-entity coverage. It covers the exterior of the condo and some basic interior features and fixtures included by the builder, such as drywall, paint, flooring, cabinetry, built-in appliances, and light fixtures. It does not cover any enhancements, improvements, or renovations made by the homeowner.
• All-in coverage: This is the most comprehensive type of coverage. It includes everything in walls-in coverage and also covers any upgrades and enhancements made by the homeowner, such as remodelled kitchens and bathrooms or upgraded appliances.

The type of master policy your HOA has will determine the gaps in coverage that you need to fill with your individual condo insurance policy. For example, if your HOA has bare walls coverage, you may need to purchase additional insurance to cover your personal belongings and any interior features. On the other hand, if your HOA has all-in coverage, you may not need as much additional insurance, as more items will already be covered by the master policy.

It is important to understand the details of your HOA's master policy before purchasing condo insurance to ensure that you have the proper level of coverage for your unit and personal belongings.

Condo insurance covers damage to the building, grounds, and outdoor features

Condo insurance is designed to cover what your condo association’s master policy won’t. Condo association insurance covers damage to the building, grounds, and outdoor features. This includes the exterior of the building and common areas, but not what's inside individual units. This is where condo insurance comes in.

The master policy could either be an "all-in" or "single-unit" policy, or a "bare-walls-in" policy. An all-in policy covers attached appliances, wiring, plumbing, and carpets in your condo. A bare-walls-in policy does not cover anything within your walls, including appliances and carpets, and may or may not cover plumbing and electrical units.

If your condo association has an all-in master policy, you usually don't need your own dwelling coverage policy. However, if you have a bare-walls-in policy, you may need to buy additional coverage to insure appliances and fixtures.

Condo insurance can also cover your personal belongings, valuables such as jewelry, electronics, and artwork, and pay out if you're found responsible for injuring someone. It can also cover additional living expenses if you are temporarily displaced from your condo due to a covered event, such as a burst pipe.

It's important to review your condo association's master policy to understand what is and isn't covered, so you can determine the type and amount of condo insurance you need to fill any gaps.

Condo insurance can be purchased with optional coverages, like extended protection coverage

Condo insurance, also known as HO-6 insurance, is designed to cover what your condo association's master policy won't. A standard condo insurance policy covers your personal belongings and pays out if you're found responsible for injuring someone. However, there are potential coverage gaps in condo policies, and you may need to purchase additional coverage for expensive items like jewellery, artwork, or musical instruments. This is where optional coverages come in.

Another example of an optional coverage is HostAdvantage, which is also offered by Allstate. If you're planning to rent out your condo to others, HostAdvantage can provide coverage for stolen or damaged items during the rental period. This is particularly useful if you intend to utilise your condo as a rental property, providing you with peace of mind and financial protection.

Water backup coverage is another optional coverage that you may want to consider. This type of coverage is offered by insurers like Allstate and American Family. It's designed to protect you in the event of water damage, including hidden water damage behind walls and under floors, which can be a significant concern in condo units.

By purchasing condo insurance with optional coverages, you can tailor your policy to your specific needs and ensure that you have comprehensive protection for your condo unit and personal belongings. It's always a good idea to review your condo association's master policy and identify any gaps in coverage to determine which optional coverages would be most beneficial for your situation.

Condo insurance rates vary depending on location, coverage amount, and deductible

Condo insurance rates can vary depending on several factors, primarily location, coverage amount, and deductible.

Firstly, location plays a significant role in determining condo insurance rates. The cost of insurance can differ from state to state and even within the same state, as each condo association has its own master insurance policy. This policy, which is included in your HOA fees, typically covers the building, grounds, and outdoor features. However, it's important to note that the level of coverage can vary, with some policies only insuring the bare structure, while others include attached appliances, wiring, plumbing, and carpets. Understanding the specifics of your HOA's master policy is crucial in determining how much additional coverage you need.

The coverage amount you choose will also impact your condo insurance rates. The amount of coverage you need depends on the value of your personal belongings, any improvements or renovations you've made, and the level of liability coverage you require. It's important to accurately calculate the value of your possessions and any building property you're responsible for insuring. Additionally, consider scheduling valuable items like jewelry, artwork, or musical instruments to ensure they're covered at their full value.

Lastly, the deductible you choose will affect your condo insurance rates. The deductible is the amount you agree to pay out of pocket before the insurance company covers the remaining costs of a claim. A higher deductible typically results in lower insurance rates, while a lower deductible leads to higher rates. For example, the average condo insurance cost is $656 per year for $60,000 in personal property coverage and $300,000 in liability with a $1,000 deductible.

It's worth noting that condo insurance rates can also be influenced by other factors, such as the insurance carrier and any optional coverages you add to your policy. It is recommended to get quotes from multiple companies and compare similar coverage amounts and deductibles to ensure you're getting the best price for the coverage you need.

Frequently asked questions