What Is Condo Insurance, and What Does It Cover?
Condo insurance covers damaged or stolen belongings as well as liability costs if you're found responsible for injuring someone.
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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 will also pay out if you’re found responsible for injuring someone.
Because condo policies have potential coverage gaps, it’s often wise to work with an experienced insurance agent.
If you own a condominium, your condo association will likely insure the building and common areas. But the association’s master policy won’t help you if your belongings are stolen or get destroyed in a fire. For those and other potential disasters, you’ll need a personal condo insurance policy, also called individual condo insurance or HO-6 insurance.
Personal condo insurance is generally required only if you have a mortgage. But even if your condo is paid off, you may still need it.
What is condo insurance?
Personal condo insurance covers what your association’s master policy won’t, including furniture, electronics and other items inside your unit. If someone steals your TV or a burst pipe ruins your dining room set, your condo policy can reimburse you.
Condo insurance also offers liability coverage in case your dog bites someone or a guest gets hurt in your home. (Note that some insurers won’t cover certain dog breeds.)
Below are some common problems a standard individual condo insurance policy will and won’t cover. You may be able to buy extra insurance for some of the scenarios that aren’t included.
Usually covered
Fire and smoke.
Explosions.
Wind and hail.
Theft.
Vandalism.
Lightning.
Burst pipe.
Usually not covered
Earthquakes.
Flooding (i.e., heavy rainfall or storm surge).
Intentional injuries to others.
Nuclear hazards.
Damage from birds, rodents and insects.
Wear and tear.
Damage from underground water (i.e., sewer backup).
What does a condo association’s insurance policy cover?
The association’s master insurance policy generally covers:
Damage to the building’s exterior. For example, the master policy usually pays for storm damage to the roof or siding.
Damage to common areas. Your association’s master policy typically covers damage to places like the lobby, elevators, hallways and tennis courts.
Injuries sustained in common areas. Say a visitor slips on an icy walkway outside the front door to the building. If they are injured and file a lawsuit, your association’s insurance could cover the liability costs.
The above is general guidance. Ask your property manager or condo board member for a copy of your association’s master policy to learn exactly how your condo association’s policy works.
Did you know...
HO-6 insurance is another name for condo insurance. The term refers to one of several types of home insurance policy forms used industrywide. For example, most homeowners buy HO-3 policies, while renters have HO-4 policies.
An HO-6 policy form insures condos and co-ops. Although condominiums and co-ops have different ownership structures, insurance policies for individual owners work pretty much the same way.
Individual condo insurance coverage
Individual condo insurance covers your belongings and may offer financial protection if someone sues you. 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 part of a standard condo insurance policy.
Personal property
Personal property coverage pays to replace your belongings if they’re stolen or damaged by an event listed in your policy. These “named perils” typically include scenarios like fire, wind and hail.
Personal property coverage usually has a deductible such as $500 or $1,000. This is the amount of a claim you need to pay out of pocket before the insurance covers the rest. A standard condo policy often covers valuables such as jewelry, electronics or artwork only up to certain limits. If you have expensive items, you may need to buy extra coverage. The insurance company will likely require an appraisal.
Example: A thief breaks into your condo and steals a TV, two laptops and a necklace, worth a total of $3,000. If you had a $500 deductible, insurance would reimburse you $2,500.
Additional living expenses or loss of use
If you can’t live in your unit because of a covered event, the additional living expenses coverage on your condo insurance policy can pay hotel bills and other expenses. This part of your policy is sometimes called loss of use coverage.
Example: You have to move out of your condo for a couple of weeks during repairs for a burst pipe. An HO-6 policy could pay for hotel bills, restaurant meals and laundry expenses.
Liability and medical payments
There are two parts of an individual condo insurance policy that can help if someone is hurt in your unit or you accidentally damage someone else’s property.
Personal liability coverage kicks in for pricey scenarios such as a lawsuit after your dog bites someone at the park. For this coverage to apply, you must be found responsible for the injury or property damage.
Medical payments coverage generally has a lower limit and can pay the medical bills of someone hurt in your unit, regardless of whether you're at fault.
Example: While visiting your condo, a friend trips over an extension cord and breaks his wrist. Your medical payments coverage could help with his doctor bills.
Dwelling or building property coverage
Most personal condo policies include dwelling coverage, also known as building property coverage. This part of your policy covers your unit’s interior.
How much building property insurance you need depends on how your condo association’s master policy works. Before buying individual condo insurance, check with your association to see which of the following coverage types is included in its master policy.
All-inclusive or all-in coverage
With this option, your association’s master policy will cover all items built into your unit, including light fixtures, appliances and cabinets. It will also cover improvements you make to these elements. If your association carries all-inclusive coverage, you may not need dwelling coverage on your individual condo policy.
Single entity coverage
Single entity coverage is similar to all-in coverage. However, it doesn’t include improvements or additions you make to your condo, only the original fixtures and appliances. If your association’s master policy provides single entity coverage and you make major upgrades, having building property coverage is a good idea.
Bare walls coverage
This coverage includes the walls, floors and ceilings of the unit but not anything attached to them, such as carpets or appliances. You’ll need to buy building property coverage under your individual condo policy for these items.
As with personal property coverage, your building property coverage generally applies only to events specifically named in the policy such as theft and fire.
Example: A fire in the unit next to yours spreads to your kitchen, destroying most of the room. Your condo association’s master policy offers only bare walls coverage, so the building property coverage on your individual policy pays for new cabinets and appliances.
Loss assessment
If your condo association goes above the limits of its master policy — say, when repairing major hail damage to the building — each unit owner might need to help make up the difference. Loss assessment coverage can help cover this expense.
The master policy could also have a large deductible, and the association might split that cost among all unit owners. Alternatively, the association could ask an individual unit owner to pay 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.
This coverage typically applies only when your individual policy covers the cause of the damage in question. Say your association asks you to help pay for flood damage repairs, but you haven’t added flood insurance to your individual condo policy. In this case, loss assessment coverage wouldn’t help you.
Optional condo insurance coverage
If a basic HO-6 policy isn’t enough, 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 for personal property
A standard policy covers your personal belongings on an actual cash value basis. That means if you file a claim for older items, the insurer would pay their depreciated value. Consider replacement cost coverage if you have lots of older items you’d want to replace if they were stolen or damaged.
Water backup
Condo insurance typically won't cover damage if a clogged drain or malfunctioning sump pump sends water into your unit. Adding a water backup endorsement can fill this coverage gap.
Scheduled personal property
Certain valuable items such as jewelry, art and firearms often have limited coverage under the personal property section of your policy. For example, even if your total personal property limit is $100,000, your policy may cover jewelry theft only up to $2,500. If your valuables are worth more than this sublimit, you can buy scheduled personal property coverage for them.
Identity theft
Many people aren’t aware that their condo insurance policy could potentially help if someone steals their identity. Adding an identity theft endorsement may provide coverage for legal bills, lost income or other recovery expenses.
Vacant or unoccupied condo
A standard policy may not cover damage to a condo that’s left empty for more than 30 to 60 days. 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.
How much condo insurance do you need?
Condo policies can be tricky to buy because there’s a lot of variation in state laws and association bylaws. Consider working with a licensed insurance agent who can help you find the right coverage for your situation. Here are some general guidelines on how much coverage you may need for different types of condo insurance.
Personal property coverage: To figure out how much personal property coverage you need, take stock of what you own.
For an estimate of what your belongings are worth, you can use the calculator below. Consider rounding up to the nearest $10,000 to make sure you have enough coverage.
Liability coverage: Liability coverage limits for individual condo insurance generally start at $100,000. To decide how much you need, tally up the total amount you could lose if someone sues you. Include the value of your savings and investments, vehicles and other assets. Buy enough liability coverage to cover at least that amount. This will protect your finances if someone sues you.
If you can’t get enough liability coverage to protect your assets, consider buying umbrella insurance. It’s a separate policy offering extra liability coverage beyond your existing policies.
Building property coverage: Before choosing a building property coverage limit, review your association’s master policy. The amount of coverage you need will depend on whether you have to cover appliances, cabinets, carpets and light fixtures.
Loss assessment coverage: Some condo policies include loss assessment coverage, while others offer it as an optional add-on. Even when it is included, the coverage limit is often fairly low (typically $1,000 or $2,000). You may wish to add more coverage, especially if your condo association’s master policy has a high deductible.
Questions to ask about your condo’s association policy
Pay particular attention to the deductible and what the master policy covers within individual units. Make sure you know the answers to these questions:
Which parts of your condo unit, if any, are covered by the association’s master policy? Do you need to insure your own cabinets and fixtures? If so, you may need building property coverage.
How high is the deductible on the master policy?
Is there an established fund to cover this deductible, or would the association divide the amount among all unit owners?
Could a single unit owner ever be responsible for the whole deductible (for example, if negligence on their part led to a fire that damaged a common area)? If the deductible is high and may fall solely on you, you may need loss assessment coverage.
Knowing your potential risk can help you choose the right condo insurance.
How much does condo insurance cost?
The average condo insurance cost is $490 per year, according to NerdWallet's rate analysis. Condo insurance rates vary widely depending on where you live, how much coverage you need and the deductible you choose. Learn more about how much condo insurance costs in your state.
How to buy condo insurance
Many companies that offer homeowners insurance also sell policies for condos. You can generally get condo insurance quotes on the insurers’ websites or by calling them. If you’d rather let someone else do the legwork, you can ask an independent insurance agent to compare quotes on your behalf.
Below are some widely available condo insurance companies to consider. Smaller regional insurers may also offer solid coverage options. A local independent agent can help you find them.
Allstate
Allstate offers a long list of optional endorsements you can add to your condo policy. For example, HostAdvantage covers damage to your belongings during periods when you rent your condo out to others. You can also add coverage for identity theft, lost electronic data or water damage from backed-up drains.
Amica
Amica offers standard and dividend condo insurance policies. The latter generally cost more upfront but could return up to 20% of your premium to you as a dividend. If you have a claim, Amica’s partnership with Contractor Connection can help you find a professional to do the repairs.
Chubb
Chubb's condo policies include $5,000 to $50,000 of loss assessment coverage, depending on the circumstance. In certain states, you can get extended replacement cost coverage to make sure you can fully restore your condo even if your policy’s limits aren’t high enough. Chubb aims to issue payment for approved claims within 48 hours.
Farmers
Farmers offers various ways to save on your condo policy. For example, discounts are available if you bundle multiple policies (such as condo and auto), have a security system or pay your premium on time for at least 12 months. Policies include loss assessment coverage in case your HOA asks all unit owners to chip in for a major expense.
Liberty Mutual
A Liberty Mutual condo insurance policy includes the basics and will also cover your stuff for 30 days during a move, including in a storage facility. You can save on your premium by bundling policies, going at least three years without filing a claim or installing protective devices in your home.
Nationwide
Nationwide has several types of optional coverage to choose from. For example, you can buy extra insurance for valuables and for water damage from backed-up sewers and drains. You can also add Brand New Belongings coverage to your policy, which insures your stuff on a replacement cost basis rather than actual cash value.
State Farm
State Farm offers wide-ranging condo insurance policies that may keep pace with rising costs by automatically increasing your coverage limits. In most states, State Farm condo policyholders can get a free Ting device, a smart plug that monitors your home’s electrical network to help prevent fires.
Travelers
Travelers may give you a discount on your condo policy if your unit has smoke detectors, sprinklers or a home security system The company also offers savings if you’ve bought your condo within the past 12 months. You can get extra coverage for valuable items like jewelry or fine art without an appraisal.
USAA
USAA condo insurance is available to active-duty military members, veterans and their families. Policies include coverage for damage to your uniforms, military equipment and other belongings when you’re deployed, with no deductible. They can also pay up to $50,000 for loss assessments from your association to repair damaged common areas.
How to save on condo insurance
Here are three ways to pay less 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. Some insurers offer discounts if your unit has safety devices like smoke detectors and deadbolt locks.
Raise your deductible. Only raise your deductible if you have enough savings to pay the higher amount in an emergency. Otherwise, the lower premium may not be worth it.
To find the average cost of condo insurance in the U.S., NerdWallet calculated the median rate for 35-year-old condo unit owners from multiple insurance companies in every ZIP code across all 50 states and Washington, D.C. Rates were rounded to the nearest $5.
Sample unit owners were nonsmokers with good credit living in a two-bedroom condo. They had a $1,000 deductible and the following coverage limits:
$70,000 in dwelling coverage.
$50,000 in personal property coverage.
$300,000 in liability coverage.
$30,000 in additional living expenses coverage.
$1,000 in medical payments coverage.
We made minor changes to the sample policy in cases where rates for the above coverage limits or deductibles weren’t available.
These are sample rates generated through Quadrant Information Services. Your own rates will be different.
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