If you own a condominium, you need condo insurance (also called unit owner or homeowner’s insurance). A condo corporation master policy only covers a portion of the structure; individual policies provide personal property and liability coverage. Condo policies also include loss assessment coverage, which helps pay for costs the condo association would typically have to bear. You should take a home inventory to estimate your belongings’ value for the best results.
Coverage for Your Personal Property
In the same way, homeowners insurance protects their homes; condo owners need the policy to cover the things inside their units. Condo insurance offers coverage for personal property, temporary relocation costs, and liability protection. It is also typically deductible from your taxes. Choosing the right type and amount of coverage depends on the value of your personal belongings and how much coverage you are comfortable paying for.
A standard condo policy covers furniture, clothing, and appliances from damage or theft with some limitations. Those who have valuable possessions should consider an endorsement for increased coverage. Condo insurance also typically includes a certain amount of dwelling coverage which is the amount it would take to rebuild your condo to a livable state if it was completely destroyed. This coverage is based on the square footage of your home. It can include finishes such as kitchens and bathrooms. It is also important to note that a standard condo policy does not cover the common areas of the building. This means if you or your guest slip and fall in the lobby of your building, the syndicate insurance (which you help pay for through HOA fees) will cover any medical bills. Discussing the building’s insurance with your agent is recommended to understand better how this works and what you need for your coverage.
Coverage for Your Liability
Condo owners also need protection for their personal property. While a condo association master policy covers the exterior of a building and common areas, a condo insurance policy (HO-6) covers what’s inside a unit’s walls. A standard HO-6 policy includes dwelling coverage, which protects the structure of your condo, including upgrades like kitchen cabinets and recessed bookcases. It also covers built-in items within your condo, such as electrical wiring and plumbing. It is often more expensive than bare wall coverage but provides more protection.
On the other hand, personal property coverage protects your belongings if they are stolen or destroyed in a covered loss. It typically offers replacement cost coverage or actual cash value, and it can be extended to include your possessions even when you’re not in your condo. It may also provide loss of use coverage if you temporarily live elsewhere because your condo is uninhabitable due to damage from a covered peril.
It’s important to evaluate your situation and purchase the appropriate amount of coverage. It’s also a good idea to shop around and compare quotes. Talking with a knowledgeable independent agent can help you balance perfect coverage and affordable rates. It’s important to note that a standard condo policy doesn’t typically cover disasters such as flooding and earthquakes. However, you can purchase a separate flood or earthquake policy for additional coverage for these events.
Coverage for Damage to Common Areas
Condos offer a unique set of circumstances when it comes to insurance. Condo owners are responsible for their personal property, but they also share responsibility for common areas of the building, such as the lobby and elevators. Condo home insurance, also known as HO-6 coverage, helps cover the cost of damage to these shared spaces.
Condo home insurance also covers the contents of your condo, providing a certain amount of protection against theft and other disasters. To determine how much coverage you need, taking an inventory of your possessions is a good idea. Ensure you include a detailed description of each item and estimate its value, overestimating to ensure maximum coverage.
While condo associations generally carry a master policy on the entire structure, some policies can be purchased individually to cover common areas like hallways and elevators. Bare wall coverage typically offers the least protection for condo owners. In contrast, wall-in (sometimes called single entity) coverage adds to bare wall coverage by covering fixtures within individual units like kitchen cabinets and recessed bookcases.
Coverage for Damage to Other Units
A condo association’s master policy may cover shared areas like lobbies and parking garages. Still, it typically doesn’t protect personal property or pay for residents to live elsewhere after a disaster. Getting condo insurance helps fill the gaps and provides important protections that most HOA master policies leave out.
Condo insurance covers personal items inside the unit, including appliances, furniture, and clothing. It also covers damage to common areas, such as a fire or storm, that damages an elevator or hallway. Depending on the policy, it may also provide personal liability protection and additional living expense coverage.
The latter can help pay hotel bills or meals if a disaster makes your home uninhabitable. It’s important to note that these benefits usually only apply if the loss exceeds your condo association’s limit, which is why it’s often smart to buy an umbrella liability policy to get even more protection.