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What is condo insurance (HO-6) & what does it cover?

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Condo insurance protects the interior of your condo and your personal belongings when they're damaged or stolen.

Pat Howard 1600Kara McGinley

By

Pat Howard

Pat Howard

Property and Casualty Insurance Expert

Pat Howard is a senior editor at Policygenius specializing in property and casualty insurance. His work has been featured on Property Casualty 360, Fatherly, MarketWatch, and more.

&

Kara McGinley

Kara McGinley

Property and Casualty Insurance Expert

Kara McGinley is an insurance editor at Policygenius, specializing in home, auto, and renters insurance. She's been writing about insurance since 2019, and her work and insights have been referenced in Kiplinger and WRAL.com.

Updated September 14, 2021|7 min read

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As a condo owner, you’ll need a condo insurance policy to protect the interior of your condominium unit and the personal belongings inside. Condo insurance also includes personal liability coverage, which covers you in the event you’re found legally responsible for property damage or bodily injury, like if a guest injures themselves in your home.

Before deciding on condo insurance coverage, it’s a good idea to check what’s already covered by your condo association’s master policy, sometimes called an HOA policy. 

A master policy covers your building or association’s common areas, like a shared recreation room, patio, or gym, and provides at least some protection for the interior structure of your unit, but it won’t cover the personal property inside your unit.

Key Takeaways

  • Condo insurance covers the property in your condo unit, like your belongings and appliances

  • Condo insurance can also help cover legal costs if you’re found responsible for a guest’s injury or damage to someone else’s property

  • Condo owners also have condo association master policies, which cover the exterior structure of a condo building, as well as commons areas like the building lobby, hallways, and recreation areas

  • How much condo insurance coverage you need is directly impacted by your condo’s master policy

What is condo insurance (HO-6)?

Similar to homeowners insurance, condo insurance is financial protection for condo owners. A condo policy can help pay for repairs to your condo, like if you have a kitchen fire, and your personal property, like if someone breaks in and steals your TV. You can expect your condo insurance to cover the following things:

1. Dwelling coverage

This covers the structure of the condo unit itself and upgrades that you made, like your built-in appliances and custom hardwood flooring. The extent of your dwelling coverage depends on what’s already covered by your condo association policy. If you have the most thorough type of master policy, called all-in coverage, you may not need to include dwelling coverage in your condo policy. 

➞ Read our full guide to dwelling coverage here.

2. Personal property coverage

Personal property coverage covers your stuff, like your clothing, appliances, furniture, and electronics if they’re damaged, stolen, or destroyed by a peril that’s covered by your policy.

➞ Read our full guide to personal property coverage here.

3. Personal liability coverage

Personal liability coverage protects you in the event that you’re legally responsible for someone else’s injury or damage to their property, like if a friend slips and falls inside your condo or if you accidentally drop a window air conditioning unit on your neighbor’s porch. 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.

➞ Read our full guide to personal liability coverage here.

4. Loss of use coverage

Loss of use coverage covers additional living expenses if your home becomes unsafe to live in after a covered loss. If you’re forced to relocate while your condo unit is being repaired, say, after a pipe bursts, loss of use coverage can pay for things like your hotel and relocation costs.

➞ Read our full guide to loss of use coverage here.

5. Loss assessment coverage 

If the condo’s shared spaces or building exterior is damaged, and there were some remaining costs after the master policy paid out, loss assessment coverage can help pay for those remaining costs so you don’t have to pay out of pocket. Say your master policy contains $500,000 in coverage for the condo building and it’s damaged in a fire that amounts to $525,000. That remaining $25,000 will be charged to all the condo owners in the building, and if you have loss assessment coverage it can help cover your share of it. 

➞ Read our full guide to loss assessment coverage here.

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Condo insurance (HO-6) vs. condo association 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, like a lounge or recreational room, as well as providing 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 responsible for 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 coverage for the interior structure 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. That means if you installed new light fixtures or custom hardwood floors, a master policy won’t help pay for repairs if either are damaged.

What does a condo association or HOA master policy cover?

Regardless of how limited or comprehensive your HOA’s master policy is, you can expect the following to be covered by the HOA policy:

  • The exterior structure of the condominium building 

  • The building’s common areas. Exercise rooms, hallways, lobbies, swimming pools, and outdoor pavilions are all covered 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 own 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. 

1. Bare walls coverage

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, and covers 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.

2. Single entity coverage

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. 

3. All-in coverage

An all-in master policy is the most comprehensive coverage type, and covers 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 dwelling coverage to your personal condo insurance policy. 

How much does condo insurance cost?

The average cost of condo insurance nationwide is $506, according to the National Association of Insurance Commissioners [1] . 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 2018, according to the NAIC.

StateAverage annual condo insurance premiumStateAverage annual condo insurance premium
Alabama$541Montana$382
Alaska$396Nebraska$355
Arizona$400Nevada$424
Arkansas$539New Hampshire$332
California$535New Jersey$450
Colorado$417New Mexico$397
Connecticut$399New York$553
D.C.$369North Carolina$456
Delaware$431North Dakota$320
Florida$964Ohio$319
Georgia$493Oklahoma$631
Hawaii$310Oregon$364
Idaho$420Pennsylvania$385
Illinois$398Rhode Island$500
Indiana$354South Carolina$500
Iowa$295South Dakota$307
Kansas$439Tennessee$473
Kentucky$390Texas$790
Louisiana$748Utah$269
Maine$342Vermont$345
Maryland$310Virginia$352
Massachusetts$444Washington$374
Michigan$369West Virginia$313
Minnesota$312Wisconsin$280
Mississippi$600Wyoming$379
Missouri$416U.S. Average$506

Optional condo insurance coverage

Condo insurance and master policies come with certain exclusions, meaning types of damage that aren’t covered. You may want to consider purchasing additional policies or adding the below coverages to your condo policy. 

Flood insurance

Condo insurance doesn’t cover water damage from flooding. If you live in an area that is prone to hurricanes or flood damage, you should consider purchasing flood insurance, which is a separate policy 

Earthquake insurance

Condo insurance also doesn’t cover earthquake damage. You may be able to add earthquake coverage to your condo policy for an additional premium, or purchase a standalone earthquake insurance policy

Second home insurance

Condo insurance is designed for owner-occupied homes. If your condo is vacant for more than 30 days, condo insurance may not cover a loss that occurs during that time. If your condo is a second or vacation home, you’ll need second home insurance

Short-term rental coverage

A base home or condo policy won’t cover your residence if you use it for business purposes, including renting it out as an Airbnb. If you plan to rent your condo out, even only on a part-time basis, you should consider adding short-term rental coverage to your property. You may also be able to purchase short term rental insurance through speciality carriers. 

Water backup coverage

Water damage from sump pump or drain backups isn’t covered by condo insurance. You can add water backup coverage to your condo policy to protect you from this type of damage.

How to save on condo insurance

If you feel that you’re paying too much for condo insurance, there are several ways you can lower your rates 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, which is the amount you are responsible for paying out of pocket before insurance kicks in. The higher your deductible is the lower your premiums are, however make sure you don’t raise your deductible to a price that you can’t afford to pay out of pocket. 

  • 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. 

  • 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 with a different company.

Frequently asked questions

What is a condo insurance policy called?

In insurance lingo, condo insurance is referred to as an “HO-6 policy”. A master policy refers to the condo association’s insurance policy that protects the structure of the building, exteriors of condo units, and shared spaces. An HO-6 policy is designed to protect your personal belongings, the interior of your condo, and your personal liability.

What is the difference between home insurance and condo insurance?

Homeowners insurance is designed for people who own standalone homes, whether it’s a house, log cabin, or a mansion with a view. It includes more dwelling coverage than condo insurance, since the homeowner is responsible for the structure of the home and the entire property (whereas a condo association is responsible for the structure of the units, the building, and the land).

Is condo insurance necessary?

Yes, condo insurance is necessary to protect your personal property, any upgrades you made to your condo, and your liability. It also contains coverage for additional living expenses if your condo needs to be repaired after a covered loss. Depending on the type of master policy you have, you may not need to include dwelling coverage in your condo policy.

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