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Updated February 17, 2021
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As a condo owner, you’ll need a condo insurance policy to protect the interior of the condominium unit and your personal belongings inside. Condo insurance also provides personal liability coverage, loss assessment coverage, and living expenses coverage if your condo becomes uninhabitable due to a covered loss.
Before deciding on condo insurance coverage, it’s a good idea to check what’s already covered by your condo association’s master policy. The master policy covers building common areas and provides at least some protection for the interior structure of your unit, but it won’t cover the personal property inside.
As the owner of a condo unit, you’re not personally responsible for damages to the condominium building, but you are responsible for the property inside of your individual unit
Condo insurance covers the interior structure of your condo, your personal property inside, any losses you’re assessed by your condo association, additional living expenses if your condo becomes uninhabitable, and personal liability
Your condo association’s master policy generally covers the exterior structure of the condo building, as well as commons areas such as the building lobby, hallways, and recreation areas
Also known as HO-6 insurance, your condo insurance coverage needs are directly impacted by what’s already covered in your condo association's master policy.
The master policy generally covers all common areas of the condominium building, as well as provides varying levels of protection for the interior structure of your condo unit, depending on the policy type.
Your HO-6 condo insurance policy, meanwhile, covers what the master policy doesn’t: personal belongings inside of your condo unit, any covered losses you’re assessed by your HOA, loss of use if a covered peril makes your condo uninhabitable, and personal liability.
Your condo unit-owner’s policy also includes structural coverage for the interior of your condo, the amount of which is determined by what your association’s master policy already covers. Most master policies cover the replacement cost of the entire interior structure of the condo unit (countertops, flooring, cabinets, fixtures) as it was when you moved in, but won’t cover any alterations or improvements to the condominium.
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Regardless of how lean or comprehensive your HOA’s master policy is, you can expect the following to be covered:
The exterior structure of the condominium building
The building’s common areas. Exercise rooms, lobbies, swimming pools, and outdoor pavilions are all protected by the association’s master policy
The land surrounding the condo building
As we touched on earlier, the amount of structural coverage you’ll need in your condo insurance policy will depend on how much coverage is already included in the master policy. Generally, master policies come in three varieties, and all have varying levels of structural protection for the interior of your condo.
Bare walls coverage covers the structure of the condo building and damage to common areas and personal property that belongs to the HOA. Bare walls coverage also usually provides minimal amounts of structural coverage for your condominium unit, protecting everything behind its walls and floors, such as the drywall, insulations, framing, wiring, and plumbing. Bare walls is the least comprehensive type of master insurance policy.
Also known as walls in or studs in coverage, single entity master policies include all the same building and common area protection as bare walls, but coverage for the interior structure of your unit extends to the outside of the walls, top flooring, cabinets, bathroom fixtures, and any part of the unit that is unaltered as of your move-in date. This is the most common type of HOA policy.
An all-in master policy is the most comprehensive coverage type, covering the entire interior structure of your condo, including unit improvements, alterations, and appliances. If your condo association has an all-in master insurance policy, you likely won’t need to add any amount of dwelling coverage to your personal condo insurance policy.
A condo insurance policy provides coverage against many of the same types of loss that are covered by standard homeowners insurance, including fire, bad weather, and theft and vandalism. Also like homeowners insurance, condo insurance won’t cover property damage caused by flooding or earthquakes — for that, you’ll need to purchase separate flood or earthquake coverage.
In terms of what makes up your condo insurance policy, you can expect coverage for the following categories:
Covers the structure of the condo unit itself. The extent of your dwelling coverage depends on your condo association policy and whether it has bare walls, single entity, or all-in coverage.
Personal property coverage covers your clothing, appliances, furniture, electronics if they’re damaged, stolen, or destroyed by a peril that’s covered by your policy.
Personal liability coverage protects you in the event that you’re legally responsible for someone else’s injury or damage to their property. Lawsuits and hospital bills can add up, so you’ll want to make sure you have enough of a personal liability cushion for a worst-case scenario accident.
If you want more personal liability coverage than what’s offered by your insurance company, you can get a personal umbrella policy to increase your liability limits.
Loss of use coverage covers any additional living expenses in the event your condo is damaged by a covered peril and made uninhabitable. If you’re forced to relocate while your condo unit is being repaired, loss of use coverage will likely pay for things like your hotel and relocation costs.
Covers your share of a loss assessment charged to all condo owners in the event of damage to the building exterior or common area.
The average cost of condo insurance nationwide is $488, according to the National Association of Insurance Commissioners. Your condo insurance rates will depend on the location of your condo, its square footage and build, and how much coverage is in your HOA master policy.
Here are the average annual condo insurance rates in each state as of 2017, according to the NAIC.
|State||Average annual condo insurance premium||State||Average annual condo insurance premium|
If you feel that you’re paying too much for condo insurance, there are several ways you can lower your rates down to a price that works for you. Here are some easy ways to save on condo insurance.
Choose a higher policy deductible. One quick way to lower your condo insurance premiums is to increase your policy deductible. If you don’t anticipate filing claims and your deductible is something low like, say, $500, consider raising your deductible to $1,000 or $2,000
Look into policy discounts. If you have protective devices in your condo, such as a centralized security system or fire alarm, make sure you’re getting credited with lower policy premiums. Insurance companies also offer discounts for paperless billing, senior citizens, and belonging to an HOA
Bundle your condo and auto insurance. If you currently have condo and car insurance through two separate insurers, consider bundling policies with the same company. Policygenius customers have saved an average of 27% by bundling their home and auto insurance with a single company
Re-shop your condo insurance policy. Consider re-shopping your condo insurance on an annual basis to ensure you’re not missing out on bigger savings
Pat Howard is a homeowners insurance editor at Policygenius in New York City. He has written extensively about home insurance cost, coverage, and companies since 2018, and his insights have been featured on Investopedia, Lifehacker, MSN, Zola, HerMoney, and Property Casualty 360.
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