How Much Condo Insurance: If you own a condominium, you can likely count on the condo association to insure the building and common areas. But the association’s master policy won’t help you if your belongings are stolen or get destroyed in a fire. For those and other potential disasters, you’ll need a personal condo insurance policy, also called HO-6 insurance.
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What is condo insurance?
Condo insurance covers what your association’s master policy won’t. This could include replacing a stolen TV or repairing the inside of your unit after a disaster. Condo insurance also offers liability coverage in case your dog bites someone or a guest gets hurt in your home. (Note that some insurers won’t cover certain dog breeds.)
What is HO-6 insurance?
HO-6 insurance is another name for condo insurance. The term refers to one of several home insurance policy forms used industrywide. For example, most homeowners buy HO-3 policies, while renters have HO-4 policies.
An HO-6 policy form insures condos and co-ops. Although condominiums and co-ops have different ownership structures, insurance policies for individual owners work pretty much the same way.
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Is condo insurance required?
As with homeowners insurance, mortgage lenders generally require you to buy condo insurance. Having this coverage in place protects the lender’s financial interest during the length of your loan.
Even if you’ve paid off your mortgage or bought the property outright, you might still be on the hook. Many associations require owners to buy individual condo policies, and they may specify minimum levels of coverage.
What does a condo association’s insurance policy cover?
In many cases, some of your condo fees go toward the association’s master insurance policy. This insurance generally covers disasters and liability issues such as:
Damage to the building’s exterior
For example, the master policy usually pays for storm damage to the roof or siding.
Common areas
Your association’s master policy generally covers damage to places like the lobby, elevators, hallways and tennis courts.
Injuries sustained in common areas
Say a visitor slips on an icy walkway outside the front door to the building. If they are injured and file a lawsuit, your association’s insurance would likely cover the liability costs.
Remember that the above is general guidance. Consider asking your property manager or a member of the condo board for a copy of your association’s master policy. Knowing exactly what’s included will help you figure out what coverage you need in your individual condo policy.
What does condo insurance cover?
Individual condo insurance generally covers your personal belongings and offers financial protection if someone sues you for negligence. Depending on what your condo association’s master insurance policy includes, your individual HO-6 insurance policy may also cover your unit’s interior fixtures and appliances.
Here’s a breakdown of each type of individual condo insurance coverage.
Personal property
Personal property coverage pays to replace furniture and other belongings if they’re stolen or get damaged by an event listed in your HO-6 policy. These “named perils” typically include scenarios like fire, wind and hail.
Example: A thief breaks into your condo and steals a TV, two laptops and a necklace. Insurance would reimburse you for those losses, minus your deductible.
A standard condo policy may cover valuables such as jewelry, electronics or artwork only up to certain limits. If you have expensive items, you may need to buy extra coverage. (The insurance company will likely ask for an appraisal — a professional assessment of the item’s value — before it will cover a pricey item.)