How Much Condo Insurance Should I Get?

If you live in a condo, you can count on the homeowners association or condo to insure the building, but it won’t help if your personal property is destroyed by fire or stolen. For these and other potential disasters, you will need to get a condo insurance policy, which is also known as HO-6 insurance. In many ways, condo insurance is more complex than the standard home insurance policies.

Before you decide how much condo insurance you should get, you will want to understand what makes it different from other types of homeowners insurance.

What Does the Condo Master Policy Cover?

Before we discuss how much condo insurance you should get, it is important to understand what your condo association master policy covers. There are three types of condo master policies, which include:

  • All In (All-Inclusive): Condo master policy helps cover all your unit’s interior and exterior surfaces. With this, you only need to worry about insuring your personal property such as furniture, clothes, etc. Any fixtures that come with the unit, such as kitchen cupboards, showers, or toilets, would be covered by the condo’s master policy. The improvement, however, can be a gray area.
  • Bare Walls In: With this condo’s master policy, you are responsible for everything inside of your unit. It only provides coverage for the exterior surface. Your individual insurance policy will have to cover appliances or fixtures such as sinks or fridges in your apartment in addition to your personal property.
  • Special Entity: This condo’s master policy provides coverage for almost all condo structures, including original fixtures in your unit. The policy doesn’t cover structural improvement or unit additions. 

How Much Condo Insurance Do You Need?

The cost of repairing a condo in the case of an accident depends on the condo’s age, location, size of the condo, and the condo’s appraised value. Some condo association’s by-laws may need you to provide a minimum coverage amount. According to the National Association of Insurance Commissioners (NAIC) reports on condo unit owner’s insurance, the average annual premium for condo insurance in the U.S was $488 in 2017.

Condos located in disaster-prone areas or weather zones (hail, hurricanes, wildfires, tornadoes) will have higher premiums because these kinds of events are not covered by basic coverage, and you will need to purchase add-on riders.

What Does Condo Insurance Cover?

A condo insurance policy is different from a homeowners insurance policy and only provides coverage for the interior of your condo. While coverage varies, condo insurance covers the following:

  • Personal property: The coverage will cover anything you can take with you, such as jewelry, appliances, artwork, and clothing.
  • Additional living expenses or loss of use: condo insurance policy also covers additional living expenses if your unit is damaged and becomes temporarily uninhabitable.
  • Loss assessment: This helps cover the cost that is associated with condo incidents
  • Liability and medical payments: This will cover you if someone is injured in your condo or their property is damaged.
  • Dwelling or building property coverage: The coverage helps pay for the cost of repairing your unit if it is damaged.

If you want to learn more about condo insurance or you are in the market for a policy, let Redwood Agency Group help you find the right policy for you. Give us a call today so we can help you get started.