How to Know if You Need Homeowners Insurance for a Condo


WRITTEN BY: Mark Romero

UPDATED: SEPTEMBER 23, 2022 | 1 MIN READ

A condo insurance policy is different from a traditional homeowners insurance policy. While you own the condo, you don’t have to cover the building or the common areas of the condo complex. Let’s explore the different types of home insurance for condos.

How To Know If You Need Homeowners Insurance For a Condo

Always request a copy of the master policy before buying a condominium. You will want to review it to decide what type of home insurance you need for your dwelling and belongings.

Most condo complexes have a master insurance policy. All the condo owners share the premium for the master policy.

Part of your homeowners association fees covers the buildings and common areas such as pools, gyms, walkways, playgrounds, etc.

Sometimes, the condo association’s (or homeowners association’s) policy extends to the unit’s interior. In these cases, the master policy covers standard fixtures, bare walls, floors, and ceilings within each condo unit.

If your condo association has this coverage, you still need an HO6 policy known as a “walls-in” approach. An HO6 policy covers what the master policy does not offer for individual condo owners.

Three main types of condo insurance are available to individual condo owners.  

Dwelling Insurance

Dwelling insurance pays to repair or replace items inside your unit. This insurance covers the inner structure, such as floors, ceilings, and walls.

Personal Property Coverage

Personal property coverage pays claims on the things your own, such as furniture, clothing, and electronics. 

Liability

Liability coverage pays medical bills for accidents inside your condo unit.

Note – Some condominium association’’ master policies have all-in coverage. The All-in features the broadest insurance coverage when insuring a condominium complex.

The All-in policy covers the entire structure of the building, from features that all the residents can use to the features only available in the individual units. It will not cover the contents of your condo.

The All-in policy is acquired and maintained by the condominium association and will be listed in the association’s rules and by-laws.

Differences between homeowners insurance and condo insurance policies

The main difference between homeowners and condo insurance is what the policy needs to protect. 

When you own a traditional, single-family home, you’re responsible for both the inside and outside, which would include everything related to the property.

When you own a condo, you’re usually only responsible for your unit’s interior, liability insurance, and personal property. 

Questions to ask when shopping for condo insurance

  1. Do I need additional coverage beyond the minimum limits if I have upgrades?
  2. What are the exclusions in the various policies?
  3. Does it cover damage from fire, smoke, or water damage, either from burst pipes, a bad roof, or sewer or water backup?
  4. What does the co-op pay in these circumstances?
  5. What is each owner out of pocket expense?
  6. Is your condo covered by the association for flood insurance?
  7. Is the coverage for replacement cost or actual cash value?

What if I don’t have condo insurance?

If you have a mortgage, the lender will require this insurance. Your HOA might also require you to keep a this type of policy. Your policy covers the family living in your home and your personal belongings, whereas the HOA master policy does not.

Where can I find condo insurance?

You should review the master policy with the condo association and shop for the required insurance.

What is the cost of condo insurance?

The average condo insurance cost is $512 per year, according to 2019 data from the National Association of Insurance Commissioners. Rates vary widely depending on where you live, how much coverage you need, and the deductible you choose.

Tips for reducing your condo’s risk of damage

  • Get involved. Attend the condo association meetings to be aware of any issues in the complex.
  • Pick up debris in the walkways and common areas to keep the environment safe. Working with your neighbors to maintain the site reduces the risk of damage.
  • Report outdoor lighting issues, water damage, or pathway issues.
  • Report maintenance issues as soon as possible to avoid property damage

FAQs

How much is condo insurance?

The average cost of condo insurance is $500.00 per year. However, rates vary depending on the condo’s location, the coverage you need, and which deductibles you choose. 

What type of homeowners insurance policy is usually required on a condominium?

The most common type of insurance for a condominium is an HO6 policy. An HO6 policy covers your condo starting at the drywall to include everything inside your home. The policy also covers your personal property and liability.

What is condo insurance called?

This type of insurance is called condominium insurance, also called an HO6 policy.

Is it mandatory to have condo insurance?

If you have a mortgage on your condo, insurance would be mandatory. Also, some condominium associations require that you have insurance.  

What is the average cost of condo insurance?

The cost varies. The insurance company would determine the price by the amount of coverage, deductibles, and location of the condo. However, the average is around $500.00 per year.

What are the advantages and disadvantages of condo insurance?

The advantage is that your personal belongings and any liability you may be responsible for are covered. Some condo association master policies only include the property up to the bare walls. With means, everything from the sheetrock in is your responsibility.

The disadvantage is that if the claim for damage or vandalism falls under the items included in the master policy (such as pool repair, roof repair, etc.), it must be voted on and approved by the condo association.

If such extensive damage, the extra amount could be passed down and divided between the co-op, which would mean everyone would pay out of pocket for the difference.

What is the minimum requirement for condo insurance?

The minimum amount of coverage required by lenders is 20% of the appraised value of your condominium unit. You should assess the value of your personal belongings, appliances, and fixtures to determine the amount of insurance to purchase to cover yourself.

What does condo insurance cover?

This insurance includes dwelling coverage, personal liability, property, additional living expenses, and loss assessment coverage.

How to purchase homeowners insurance for a condo

Condo insurance policies vary from traditional homeowners insurance policies. With a policy, you are only responsible for your personal belongings and the interior of your unit. If you’re interested in getting a policy, compare quotes online. You can get started by going to our policy comparison quote form.