What Is Condo Insurance and Why Do You Need It?
As a condo owner, you may think your homeowner association’s master’s policy covers everything. However, that is not always the case. You might also need condo insurance if you want coverage for problems like theft, fire, and accidental injuries. Let’s explore what a condominium policy is and how much you need for your unit.
HOA VS Individual Condo Insurance Coverage
Your association fees typically include your contributions to the HOA master policy of the building. This policy usually covers the building structure and shared spaces—including roofs, exterior walls, stairwells, elevators, swimming pools, and hallways. Generally, there are two types of HOA policy:
“Bare walls” condo master policy – This covers the common areas of the condo complex and a unit’s bare structural parts, such as ceilings, floors, and exterior walls.
“All-in” condo master policy – This offers the same coverage as bare walls policies but also protects your unit’s fixtures and any renovations you made.
But most HOA policies don’t cover your personal belongings or provide protection if someone sues you due to an accident in your unit. Especially if your condo complex has a bare walls policy, unit owners must obtain HO-6 policies—also known as condo insurance. It would help if you had this policy to protect your property from problems not covered by your HOA policy.
The Benefits of Having a Condo Insurance
A condominium unit is a huge investment, and your HOA’s master policy may not be enough to protect it in case unexpected events happen. Your HO-6 policy can cover your unit from problems not protected by your HOA insurance. Here are some advantages of having a condo insurance policy:
Dwelling Insurance
A condo insurance policy helps cover repair or replacement costs when a covered peril damages your condominium’s structure. For instance, if a storm causes damage to your carpets and walls, your policy can help replace your floor coverings and pay for the necessary repairs.
Liability Coverage
If your dog bites someone or your child accidentally breaks your neighbor’s window, they can sue you. A condo insurance policy will provide liability coverage if someone is injured in your unit or your family caused accidental property damage.
Medical Payments to Others
If a guest slips in your bathroom and gets injured, you may have to pay for their medical expenses. Your condo insurance can help you cover the hospital bills of people who sustained minor injuries in your condo unit.
Personal Property Protection
Your building’s master insurance policy does not cover any damage that occurs in your unit. This includes water damage from a leaky pipe or burnt furniture from a fire. A condo insurance policy will cover the repairs or replacement cost. This type of insurance will also protect your belongings in case of theft or burglary in your unit.
Additional Living Expenses
If your unit got ravaged by a storm or burned down by a fire, your condo will be uninhabitable. Your condo insurance can help pay for the extra living expenses, such as meals, lodgings, and pet boarding if you can’t live in your condominium following a covered loss. This coverage type is also known as “loss of use.”
Problems Covered by a Condo Insurance
Your HO-6 policy provides coverage for many different types of unexpected events. Below are some of the problems that are covered by your condo insurance:
Fire and lightning
Windstorms and hail
Explosion
smoke
Civil unrest
Aircraft, including self-propelled missiles and spacecraft
vehicles (including the impact from a car, but not the vehicle itself)
Vandalism
Theft
Falling objects
Weight of ice, snow, or sleet
Accidental discharge or overflow of water
Volcanic eruption
Power surges
Frozen appliances, air conditioning, and heating equipment
How Much Condo Insurance Do You Need?
The amount of coverage you need in your HO-6 policy will vary depending on several factors. Here are a few things to keep in mind when determining how much condo insurance is sufficient for you:
The Coverage of Your HOA Policy
Check first what your HOA insurance covers. If you have a bare walls master policy, you might need higher coverage for your condo insurance.
The Value of Your Personal Belongings
This includes your furniture, electronics, artwork, clothing, and other valuables. Make a list of your items and estimate the cost of replacing them.
The Cost To Rebuild Your Unit
If you have a bare walls HOA policy, you will also have to consider the cost of replacing your home in case of a significant accident. For this, you can consult an architect or contractor to give you an estimate.
Condo insurance can financially protect you and your condo unit in case of unexpected events. Consult with a trusted insurance company to get a more accurate estimate of how much protection you need.
