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What Is Condo Insurance, and What Does It Cover?

Condo insurance covers damaged or stolen belongings, as well as liability costs if guests are injured in your home.
Aug. 27, 2020
Homeowners Insurance, Insurance
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Unlike homeowners, condo dwellers don’t own the building they live in or the land it sits on. Your condo or homeowners association will carry a master policy to insure the building and common areas, but you’ll need your own condo insurance policy to protect your unit and the personal belongings inside it.

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.

You’ll often see condo insurance described as HO-6 insurance, which 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. The HO-6 policy form is used for both condo and co-op insurance. Although the ownership structures of condominiums and co-ops work differently, insurance policies for individual owners work pretty much the same no matter which type of unit you have.

» MORE: What to know about buying a condo

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. For example, individual condo owners usually aren’t responsible for damage to the building’s exterior, such as storm damage to the roof. Common areas also tend to fall under the HOA’s jurisdiction, including the land outside the building, tennis courts, the lobby, elevators and hallways.

Additionally, the HOA typically assumes responsibility for injuries sustained in common areas. 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 in case of 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 policy may also cover your unit’s interior fixtures and appliances. Here’s a breakdown of each type of condo insurance coverage.

Personal property

The personal property coverage on your condo policy will replace your furniture, clothing and other personal belongings if they’re stolen or damaged by a disaster listed in your policy. These “named perils” typically include scenarios like fire, wind and hail. 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.

There are two types of personal property coverage. The more affordable option is “actual cash value,” which means your insurer will cut you a check for the current value of your items if you have a loss. If you’d rather get enough money to buy a brand-new dining room set in place of your 10-year-old one, upgrade to replacement cost coverage.

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.

Liability and medical payments

If a visitor trips and falls on a staircase inside your unit, personal condo insurance can help cover his or her 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. Check with your association for details before buying a condo policy.

All-inclusive or all-in coverage means that 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 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 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.

Loss assessment

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.

Even for losses that are covered by the master policy, a large deductible may apply — and the association might charge an individual unit owner for that entire deductible if the damage originated in that condo.

For example, imagine 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 may kick in only when the cause of the damage in question is specifically 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.

Usually coveredUsually not covered
Fire and smokeEarthquakes
ExplosionsFloods
Wind and hailIntentional injuries to others
TheftNuclear hazards
VandalismDamage from birds, rodents and insects
LightningWear and tear
Burst pipeDamage from underground water (such as sewer backups)

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 individual policy. The amount of dwelling or building property coverage you need could vary depending on whether you need to cover your appliances, cabinets, carpets and light fixtures.

Liability coverage for condo insurance generally starts at $100,000. A good rule of thumb: 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.

» MORE: Homeowners insurance: What it is and what it covers

How much is condo insurance?

The average condo insurance cost is $488 per year, according to a report last year from the National Association of Insurance Commissioners featuring 2017 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.

StateAverage annual premium
Source: National Association of Insurance Commissioners, 2017 data
Alabama$540
Alaska$374
Arizona$389
Arkansas$518
California$501
Colorado$381
Connecticut$392
Delaware$406
Florida$942
Georgia$473
Hawaii$293
Idaho$405
Illinois$382
Indiana$345
Iowa$279
Kansas$413
Kentucky$381
Louisiana$736
Maine$330
Maryland$308
Massachusetts$441
Michigan$353
Minnesota$299
Mississippi$570
Missouri$377
Montana$373
Nebraska$332
Nevada$409
New Hampshire$316
New Jersey$437
New Mexico$381
New York$540
North Carolina$428
North Dakota$287
Ohio$315
Oklahoma$604
Oregon$345
Pennsylvania$377
Rhode Island$465
South Carolina$483
South Dakota$288
Tennessee$457
Texas$771
Utah$253
Vermont$339
Virginia$338
Washington$360
Washington, D.C.$367
West Virginia$305
Wisconsin$249
Wyoming$361

How to save on condo insurance

It’s a good idea to shop around with at least three insurance companies to find the best price for the coverage you want. Ask about discounts for bundling your condo and auto insurance with the same company, or for having safety devices like smoke detectors and deadbolt locks.

Raising your deductible is another way to save money, as long as you’re sure you’ll have enough savings to pay the higher amount if a disaster happens.

» MORE: How to find an FHA-approved condo

Condo insurance frequently asked questions

Is condo insurance tax-deductible?

In most cases, no. The IRS doesn’t permit deductions for any type of insurance on your home except for mortgage premium insurance. However, if you’re renting your condo out to someone else, you can deduct your insurance premium along with other expenses associated with the rental, such as repairs and bookkeeping fees.

Does condo insurance cover water leaks and damage?

Condo insurance is designed to cover sudden, accidental losses, not problems that develop over time, which are considered maintenance issues. That means you’d likely be covered for, say, water damage from a burst pipe, but not for mold due to a persistently leaky faucet.

If water damage originates from a problem within your unit, you’ll likely turn to your own condo insurance policy for coverage. However, your HOA’s master policy may pay if the damage is caused by an issue with the roof or another part of the building that’s considered communal property.

Keep in mind that coverage for floods or for water and sewer backup damage is not included in most condo insurance policies unless you specifically add it.

Does condo insurance cover damage to other units?

If your upstairs neighbor’s pipe bursts or a kitchen fire starts in the condo next door, the damage might spread to your unit. Who’s responsible for the cost of repairs?

If the owner of the unit where the problem originated has condo insurance, their liability coverage will often pay. In many cases, your insurance company will cover your repair costs, then seek reimbursement from the other owner’s carrier. Note that if you file a claim through your insurer, a deductible may apply.