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Condo insurance, also known as HO-6 insurance, is designed to cover what your condo association’s master policy won’t.
A typical condo insurance policy covers your personal belongings and pays out if you’re found responsible for someone's injury.
The average condo insurance cost is $506 per year.
If you live in a condominium, you can likely count on the condo or homeowners association to insure the building and common areas, but it won’t help you if your personal belongings are stolen or destroyed in a fire. For those and other potential disasters, you’ll need a condo insurance policy, also known as HO-6 insurance.
What is condo (HO-6) insurance?
Condo insurance covers what your HOA won’t, like repairing the inside of your unit after disasters, replacing damaged or stolen belongings and paying liability costs if guests are injured there.
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 are insured with HO-3 policies, while renters have HO-4 policies.
An HO-6 policy form is used to insure condos and co-ops. Although the ownership structures of condominiums and co-ops work differently, insurance policies for individual owners work pretty much the same way.
Is condo insurance required?
As with homeowners insurance, mortgage lenders generally require you to purchase condo insurance to protect their financial interest during the length of your loan.
Even if you’ve paid off your mortgage or purchased the property outright, you might still be on the hook for condo insurance because many HOAs require it.
What does a condo association’s insurance policy cover?
In many cases, some of your condo fees go toward a master insurance policy that covers certain disasters and liability issues. These may include:
Damage to the building’s exterior. For example, storm damage to the roof or outer siding would likely be covered.
Common areas. Your association’s master policy generally covers damage to places like the land outside the building, tennis courts, the lobby, elevators and hallways.
Injuries sustained in common areas. For instance, if a visitor is injured on an icy walkway outside the front door to the building, your HOA’s insurance will likely cover the liability costs from a lawsuit.
What does condo insurance cover?
Individual condo insurance generally covers your personal belongings, living expenses if you need to relocate after a disaster and damages 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 condo insurance coverage.
The personal property coverage on your HO-6 policy will replace your furniture, clothing and other personal belongings if they’re stolen or damaged by a disaster listed in the 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 these losses, minus your deductible.
Some valuables such as jewelry or artwork may be covered only up to certain limits by a standard condo policy, so you may need to purchase additional coverage if you have expensive items. (An appraisal may be required.)
Additional living expenses or loss of use
This common component of condo insurance will cover hotel bills and other expenses if fire damage or another problem covered by your policy makes your unit uninhabitable.
Example: You have to move out of your condo for a couple of weeks while damage from a burst pipe is repaired. An HO-6 policy could pay for hotel bills, restaurant meals and laundry expenses that go beyond what you would normally pay while living at home.
Liability and medical payments
If a visitor trips and falls on a staircase inside your unit, personal condo insurance can help cover their medical bills and your liability costs if you’re sued. Liability insurance may also cover incidents such as dog bites or damage you cause to someone else’s property. Note that not all dog breeds are covered by all insurers.
Dwelling or building property coverage
You may need to insure your unit’s interior with dwelling coverage, also known as building property coverage, depending on which kind of master policy your HOA carries. Before buying a condo policy, check with your association to see which of the following coverage types applies to its master policy.
All-inclusive or all-in coverage: With this option, your condo association’s master policy will cover all items built into your unit, including light fixtures, appliances and cabinets, plus any improvements you make to these elements. If your HOA carries this level of coverage, you likely don’t need dwelling coverage on your individual condo policy.
Single entity coverage: This is similar to all-in coverage except it doesn’t include any improvements or additions you make to your condo, only the original fixtures and appliances. If you make significant upgrades to your unit, you may want to add building property coverage to your policy.
Bare walls coverage: This includes the walls, floors and ceilings of the unit but not anything attached to them, such as carpets, light fixtures, appliances or sinks. You’ll need to seek coverage for these items under your individual condo policy. This type of coverage is why condo policies are sometimes called “walls-in insurance.”
As with personal property, your building property coverage generally applies only to disasters specifically named in the policy such as theft and fire.
» MORE: Compare condo mortgage rates
If your HOA surpasses the limits of its master policy — say, when repairing major hail damage to the building — each unit owner might need to contribute funds to make up the difference. If you have loss assessment coverage on your condo insurance, this sum may be partially or totally covered.
But the master policy could have a very large deductible and the association might split that cost among all unit owners. Alternatively, an individual unit owner might be charged the entire deductible if the damage originated in their condo.
Example: Your dog knocks over a candle and starts a fire that destroys part of the building’s roof. If the master policy has a $10,000 deductible, the association might hold you responsible for that amount rather than asking all the building’s owners to chip in. Loss assessment coverage may cover this type of scenario as well.
Keep in mind that this coverage typically applies only when the cause of the damage in question is covered by your policy. So if your HOA asks you to contribute to repairs from flood damage, but your own condo policy doesn’t include flood insurance, loss assessment coverage may not help you.
Which scenarios are covered, and which aren’t?
Below are some common problems that are and aren’t included under a typical condo insurance policy. You may be able to purchase additional insurance for some of the scenarios that aren’t included standard.
Usually not covered
Fire and smoke
Wind and hail
Intentional injuries to others
Damage from birds, rodents and insects
Wear and tear
Damage from underground water (such as sewer backups)
Optional condo insurance coverage
If a basic HO-6 policy isn’t sufficient, you can typically buy extra coverage in the form of endorsements, or add-ons to your policy. Below are a few common endorsements you can choose.
Replacement cost coverage for personal property
This upgrades the coverage of your personal belongings from actual cash value to replacement cost coverage, so you can buy new items if your things are stolen or destroyed.
Scheduled personal property
If you own expensive jewelry, art or other valuables that are worth more than the sublimits of your personal property insurance, you can purchase additional coverage for these items.
Water backup coverage
This covers damage if water backs up into your unit from a clogged drain or malfunctioning sump pump.
Vacant or unoccupied condo insurance
If you don’t live in your unit year-round or it’s unoccupied while you’re waiting to move in, you may need vacant home insurance. (A standard policy may not cover damage to a home that’s left unoccupied for more than 30 to 60 days.)
Identity theft coverage
This endorsement can help with expenses such as legal bills and lost income after an identity fraud or theft incident.
How much condo insurance do you need?
To figure out the amount of personal property coverage you need to replace all your stuff, take a home inventory using the calculator below. Consider rounding up to the nearest $10,000 to make sure you have enough coverage.
When it comes to the interior of your unit, review your HOA’s master policy before purchasing an HO-6 policy. The amount of dwelling or building property coverage you need could vary depending on whether you have to cover appliances, cabinets, carpets and light fixtures.
Liability coverage for condo insurance generally starts at $100,000. To decide how much you need, tally up the total amount you stand to lose if someone sues you — including the value of your savings and investments, vehicles and other assets — and select enough liability coverage to cover at least that amount.
Loss assessment is included in some condo insurance policies and is an optional add-on for others. Even when it is included, the coverage limit is often fairly low (typically $1,000). You may wish to add more coverage, especially if your HOA’s master policy has a high deductible.
Condo policies can be tricky to buy because state laws and HOA bylaws differ from case to case. Talking with a licensed insurance agent is often the best way to get coverage suggestions for your situation.
How much is condo insurance?
The average condo insurance cost is $506 per year, according to a recent report from the National Association of Insurance Commissioners featuring 2018 data, the latest available. Condo insurance rates vary widely depending on where you live, how much coverage you need and the deductible you choose. See the table below for the average condo insurance premium in your state.
Average annual premium
Source: National Association of Insurance Commissioners, 2018 data
How to save on condo insurance
There are three primary ways to reduce the price you pay for condo insurance:
Shop around. We recommend getting quotes from at least three insurance companies to find the best price for the coverage you want.
Look for discounts. You might be able to save if you bundle your condo and auto insurance with the same company, or if your unit has safety devices like smoke detectors and deadbolt locks.
Raise your deductible. Don't do this unless you feel confident you would have enough savings to pay the higher amount in an emergency.