Charles Baisden

For most people, a condominium is one of their most prized possessions. Therefore, it’s essential to ensure that both your condo and valuable items are well-protected.

Different types of Home Owners Association (HOA) insurance policies offer various coverage levels. The policies cover shared structures and common areas. This means you need to purchase a condo insurance policy to protect your unit and belongings.

Let’s explore what condo insurance means, what it covers, and how much it costs.

What is condo (HO-6) insurance?

Condo insurance is also referred to as an HO-6 insurance policy. The insurance policy is meant to protect condo units and provides living expense coverage in case it’s no longer suitable to live in. The insurance policy also includes personal liability coverage if your guest gets injured.

HO-6 policies protect the individual unit. Common areas in the building are usually considered in an insurance cover by the condo association or homeowners’ policy.

The condo unit owner bears the responsibility of purchasing the condo insurance policy. It covers repairs inside your unit and the replacement of personal belongings in case of theft or damage. The insurance also protects against claims in case of injury inside your condo.

Is condo insurance required?

Mortgage providers often need you to acquire condo insurance. It protects them financially during the loan term. Most HOAs also require condo insurance. This is regardless of whether you purchased the property directly or have already cleared your mortgage.

What does a condo association’s insurance policy cover?

The HOA or condo association has a master insurance policy. It covers common areas in the building, such as elevators. Particular exterior parts and the roof of the building are also covered.

Most master insurance policies cover specific liabilities and disasters. A few examples include:

–   Exterior and roof damage caused by a storm

–   Damage to common exterior areas like hallways and lobbies

–   Liability costs from Injuries in common areas.

Condo master insurance policies have three main types:

Bare walls coverage

This master insurance policy covers the structure, most furnishings, and fixtures in shared areas. The policy also protects other properties that the condo association owns.

Single entity coverage

This policy includes everything covered by the bare walls plan, plus the in-built items like the fixtures inside the condo.

All-in coverage

This policy covers any part of the condo structure, plus other property that the condo association owns. It offers the most coverage, including all additions and improvements to the condos.

What does condo insurance cover?

Condo insurance policies cover personal items and liabilities in case you get sued for negligence. It also includes your living expenses in case of relocation due to a disaster.

Based on the type of insurance policy your condo association uses, your HO-6 insurance policy can also cover the appliances and features inside your unit.

Generally, condo insurance policies have several coverage types:

Dwelling coverage

Dwelling coverage for condos protects the items under your responsibility. It’s inclusive of any improvements to fixtures and appliances.

It’s important to know the exact parts of the condo you’re responsible for and how much the coverage will cost.

Condo insurance for personal property

Condo insurance for personal property covers your items like appliances, furniture, and clothing. It has few specific exclusions and limitations.

Loss of use coverage

Loss of use coverage takes care of your living expenses if you cannot live in your condo due to a loss.

Medical payments coverage

Medical payments coverage assists in paying for medical bills in case of an emergency. Regardless of the location, it can also help cover bills if your pet or family member causes an injury.

Personal liability coverage

Personal liability coverage takes care of legal fees. For example, if you get sued, a guest medical coverage can cover injury-related medical bills for injuries to guest in your condo.

You can also purchase building property protection to cover interior wall repairs and in-built fixtures.

Condo flood insurance

Natural disasters usually surprise people. However, the flood insurance policy is generous enough to protect your personal belongings and condo in case of damage due to floods.

Umbrella insurance for condos

Umbrella insurance takes effect when the cost of a covered loss exceeds your policy’s limit.

Optional types of condo insurance coverage

You can get additional coverage for your insurance policy, for example:

‘New for Old’ coverage

“New for Old” coverage pays the current cost of replacing your items with new ones. It doesn’t matter how long you had the items in your possession.

Valuable items blanket coverage

This type of coverage is vital if you possess valuable items such as art. In case of damage or theft, it raises your policy’s limit to $10,000 for each item.

Scheduled personal property coverage

This type of coverage provides additional protection for valuable or expensive items in case of damage.

How much HO-6 insurance do I need?

To understand how much ho6 coverage you need, let us look at insurance policies issued by condo association.

The amount of condo insurance you require depends on the type of master insurance policy your HOA or condo association uses.

To determine the coverage for personal items, start with an inventory of your home. Before selecting an HO-6 policy, go through the HOA’s or condo association’s master policy.

In general, liability coverage for condos starts from $100,000. The amount varies based on the specific items covered, such as fixtures and appliances.

When determining how much coverage to get, consider the legal fees if you get sued and the value of your current assets. The coverage you select should be able to cover this amount.

How much is condo insurance?

According to the National Association of Insurance Commissioners, the average cost of condo insurance is about $488 to $506 annually. The rates differ based on the location or state, the coverage amount, and the selected deductible.

How to save on condo insurance

Compare prices

Get quotes from 3 or more insurance providers to get the best price on the amount of coverage you need.

Seek discounts

For instance, if you combine vehicle and condo insurance from the same provider, it may be possible to get a discount.

Increase your deductible

In many cases, it’s not possible to deduct homeowners’ insurance premiums from taxes. But, if you have a home office or rent out your home, you can claim the deduction.

So, is condo insurance tax deductible? Yes, it’s possible to deduct the insurance premiums from your tax returns. However, the condo insurance deductible coverage has few limitations.

Increasing the deductible on your policy reduces the insurance premiums on your condo. If your savings can cover the maximum amount you’d need in an emergency, it’s not necessary to increase your deductible.

Frequently asked questions

What type of insurance does one require for a condo?

Condo insurance is specifically for supplement the HOA’s or condo association’s master insurance policy. It protects personal items, in-built fixtures, plus appliances.

If you get sued due to negligence, or you require to move as a result of a disaster, the insurance covers the expenses.

Do condo insurance policies include special assessments?

Select condo insurance policies don’t cover loss assessments or special assessments. For instance, the cover can only be for roof damage from a fire.

What’s the difference between the homeowners’ insurance HO-3 vs HO-6?

The major difference between the two is that HO-3 policies protect single-family homes while HO-6 policies protect condos.

Since condo occupants don’t possess the entire building or the land it sits on, an HO-6 policy protects the individual unit and items inside.

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