If you own a condominium, it’s extremely important that you have condo insurance.
Whether you’re new to condo life or you’ve had a condominium in the past, there are several key things to know about this specific type of insurance.
Read on to learn what condo insurance is, how it differs from homeowner’s insurance, and much more.
What is Condo Insurance?
As the owner of a condominium, you don’t actually own the building you live in, nor do you own the land that the building sits on. The condo or a homeowner’s association (also referred to as an HOA) carries a master policy that insures the building. The HOA pays for things like accidents that might occur outside of the property or in a common area.
When bad weather, a fire, or a natural disaster happens, your HOA will likely not repair the inside of your unit, nor will they replace items that have been damaged or stolen. They probably also will not be liable for any costs that you might incur if someone gets injured while inside your condo.
With condo insurance, you will get reimbursed for these items and repairs since anything inside your condominium is considered your property and your responsibility. Condo insurance is also referred to as an HO-6 policy, and it’s almost always required if you purchase a condominium.
Condo Insurance vs. Homeowner’s Insurance
There are several distinct differences between traditional homeowner’s insurance and condo insurance. One major difference is that homeowner’s insurance will cover the repair or replacement of the structure you live in. With condo insurance, this is covered by the HOA’s master policy.
Condo insurance also does not cover floods, but homeowner’s insurance will if the owner purchases a separate flood policy. As a homeowner, you’ll pay for the insurance as part of your monthly mortgage payment. Condo owners may have to pay for their policy separately, and they may also have to pay the HOA a separate fee for their master policy depending on your building.
The structural coverage is really where these two types of policies differ the most. When you own a home, you’re responsible for insuring the building and any other structures you may own, such as a shed. When you own a condo, the HOA is responsible for protecting and insuring the entire structure that everyone lives in.
Before you purchase a condominium, ask if you can see a copy of the master insurance policy. This will give you more detail about what is and isn’t covered so you can determine what extra supplemental coverage you may need.
HOA vs. Condo Insurance
If you own your unit, you will need to make sure that things like appliances, flooring, and fixtures are covered by your condo insurance. Some HOA policies have what’s called an “all-in” policy that may cover the original items that were already existing in your condo. This could include anything from plumbing and wiring to cabinetry, but you’ll need to make sure that this is included.
HOA insurance will not cover any personal belongings that you own. If someone breaks in and steals items from your condo, your policy should cover the replacement costs. This also applies if anything gets damaged and belongs to you.
If a visitor were to get hurt while inside your condo, your policy should cover the liability costs. However, if they get hurt outside or in a common area, the HOA will be responsible to handle the matter with their master policy.
Most condo insurance will pay for living expenses if you have to stay somewhere temporarily while your unit is being repaired. This coverage is part of your personal policy, and not the HOA’s.
If the outside of your building is damaged, the HOA is responsible to repair it. If there is any damage to common areas like playgrounds, the lobby, or tennis courts, for example, that is also covered under the HOA’s policy. This also applies to injuries sustained in these areas, as long as it’s not inside your unit.
How Much Does Condo Insurance Cost?
The condo insurance rate you pay varies by state, and it also varies depending on your deductible and other limits. Some states have a much higher average rate like Florida since there are a lot more condominiums there than in other states like Alabama.
Talk to an insurance provider and get several quotes so you can find the best rate possible. Your deductible plays a major role in how much your condo insurance will cost, as does the value of your personal belongings.
On average, the cost of condo insurance can range from around $100 to $400 per year. This is much less expensive than most homeowner’s insurance policies.
How Much Condo Insurance Should I Buy?
The amount of coverage you choose depends largely on what your HOA covers. It will also depend on what you own and how much the replacement costs are. If you own things like fine art, furs, or jewelry, you may want to purchase a higher level of coverage.
Your location also determines how much condo insurance you should buy. If you live in a hurricane or severe weather-prone area, it’s best to increase your coverage so you can be protected.
Take inventory of the things you own and compile a list of their estimated replacement value. Find out what your HOA master policy covers, and this should help you determine how much condo insurance you’ll need in order to stay protected.
Live the Good Condo Life with Insurance
Once you understand the basics of condo insurance, you’ll be able to find a policy that fits your needs. Talk to your HOA and be sure to get several quotes before you sign on the dotted line so you know that you’re getting the best coverage possible.
If you need insurance and want more information, visit our website and contact us today for a quote.