What Is Condo Insurance?

When you purchase a condominium, you want to protect that investment in case of adversity — whether a fire, plumbing catastrophe, liability or theft, to name a few. The condo association should maintain insurance on the building, but it will not deliver all the coverage a condo owner needs.

An HO-6 condo policy will insure your unit and can provide liability coverage. Condo association insurance typically does not cover all damage to the structure or contents in a member’s condo unit, leaving an insurance gap and making you vulnerable to financial loss. You can close that gap by buying a condo policy.

A condo policy is a contract between you and an insurance carrier. You agree to pay premiums in a timely fashion, and the carrier agrees to provide you with specified coverages. Your insurance coverage is determined by the insurance policy you select. Clauses in it may address:

• Structural damage to the interior of your condo unit — for example, from a fire or plumbing problem — that requires ceiling, wall or floor repair.
• Appliances.
• Loss of personal property and valuables, such as computers, jewelry, antiques, art or other items.
• Temporary housing costs incurred after a fire or storm made your condo uninhabitable.
• Liability for accidental injuries or damages to others, such as a pet biting a neighbor; water damage in an adjacent unit because your child overfilled the bathtub; or other damages associated with a lawsuit.

To evaluate your condo insurance needs and purchase the policy that is right for you, be sure you know what master policy coverage your condo association purchased. A “bare walls” policy will provide you, the condo owner, with little to no coverage in your unit, while an “all-in” condo master policy may cover some items, such as appliances, electrical wiring, or plumbing.

Your Trusted Choice® Independent Insurance Agent can review your condo master policy and help you determine your insurance needs. Your Trusted Choice agent is independent and can provide rate comparisons for policies offered by numerous companies and help you make your policy selection.

If the Condo Association Has Insurance, Why Would a Unit Owner Buy a Condo Policy?

Condo association insurance may not meet all your coverage needs as an owner. Condo associations oversee management of the common property owned by the condo association’s membership (the condo unit owners), including grounds surrounding the structure(s), any amenities, and structural aspects of the building(s) that must be maintained. The insurance they purchase to protect the association’s interest in this property may or may not include aspects of the interior of a member’s condo unit.

The extent of coverage carried by an association will affect what policy you, as a condo owner, need to buy. Condo insurance may cover damages resulting from theft, fire, or a severe storm, including temporary housing costs if your condo is significantly damaged. Condo insurance provisions also may cover your loss of personal possessions and personal liability and medical coverage in the event someone is injured in your unit. Policy deductibles and payment limits govern when payments kick in and define maximum payments that the insurance may make in such instances.

Additionally, the purchase of HO-6 policies (which are specifically for condos, townhouses, and co-ops) often are stipulated by lenders.