Many people prefer condos to single-family homes because condos tend to be more affordable and you don’t have to maintain the grounds and amenities. If you’re in the process of buying a condo, you’ll need to purchase a condo insurance policy.

Condo insurance, otherwise known as an HO-6 policy, covers you for any damages and repairs needed for your condominium unit. It’s a type of homeowners insurance, but it only covers the inside of your individual unit. Learn how condo insurance works and what you can do to find the best policies and rates.

Best condo insurance companies

The best condo insurance company for you depends on your specific needs, how much you can afford to pay in premiums, and more. Here’s a look at the three best insurers for condo owners.

Allstate: Best for discounts

American Family: Best for extended coverage

Amica Mutual: Best for customer service

What condo insurance covers

Here’s an overview of each type of coverage under a standard HO-6 policy:

Condo insurance doesn’t cover damage from flooding or earthquakes, so you may want to pay for additional coverage if you live in an area where either of those is common. And you may want to purchase a personal property endorsement if you have several high-value items. This will ensure your belongings are insured to their full value.

What an HOA master insurance policy covers

A master condo policy protects the structure of the building and common areas you share with other people. For example, if an elevator breaks or the roof is damaged in a hailstorm, the master insurance policy will cover the necessary repairs.

These are some other protections an HOA master insurance policy provides:

• Structure of the condo: The structure includes the drywall, framing, wiring, and plumbing.

• Property coverage: This includes property that the HOA owns and maintains, including the clubhouse, swimming pool, elevator, and stairs.

• Liability coverage: Liability coverage pays for accidents or injuries that occur in shared spaces in the condo, like if someone slips on a walkway.

• Standard fixtures: In some cases, the master policy covers standard fixtures within the individual units. It’s important to read your homeowners association bylaws to find out what it covers and what you’re responsible for.

Condo insurance for renters

If you purchase a condo, your mortgage lender will require you to purchase condo insurance. But even if you’re just renting the unit, it’s a good idea to purchase condo renters insurance.

This policy covers your personal belongings, liability, and additional living expenses if the condo becomes uninhabitable due to damage. But condo renters insurance won’t cover the building or the structure of the condo since the landlord is responsible for both.

Renters insurance provides valuable coverage, and it’s much more affordable than other types of insurance. It costs an average of $15 to $30 per month, depending on your location and belongings, according to the National Association of Insurance Commissioners (NAIC).5

Cost of condo insurance

The national average cost of condo insurance is $583 annually for $200,000 in dwelling coverage and $1,014 for $400,000 in dwelling coverage. But the exact cost of insurance depends on your location and the insurer you choose.

Here’s a look at six national insurers and the average costs of condo insurance from each.

Factors that affect the cost of condo insurance

Here are the biggest factors that affect the cost of condo insurance:

• Location: Your location is a big factor affecting your condo insurance cost. If you live in an area with a high crime rate or high incidence of natural disasters, you’ll pay higher insurance premiums. For example, residents in California and Florida may have a harder time finding coverage because of the likelihood of severe weather.

• Level of coverage: Purchasing more robust coverage will cause your insurance premiums to go up, and adding on optional policies will also increase the costs.

• Credit history: In most states, insurance companies look at your credit-based insurance score to predict how likely you are to file a claim. This means people with good credit will pay lower insurance rates than people with bad credit.

• Claims history: If you have a history of filing insurance claims, you may get stuck paying higher premiums. Your insurer could see a history of claims as an indication of risk.

• Deductible: When you file a claim for a covered loss, you’ll pay an out-of-pocket deductible before your insurance coverage kicks in. The higher your deductible, the lower your monthly premiums will be, and vice versa.

How to compare condo insurance

Price is a big concern for many people, but it’s not the only factor you want to consider when shopping for condo insurance. Follow these four steps when comparing condo insurance policies.

1. Determine your coverage needs

Start by evaluating the value of your belongings and determining how much coverage you need. Read your HOA’s bylaws to determine what the master insurance policy covers and what you’re responsible for.

If you’re unsure about your coverage needs, an insurance agent can assess your situation and make coverage recommendations.

2. Look for discounts

When you’re evaluating different insurers, consider the discounts they offer since discounts are an excellent way to save on your insurance premiums. For example, most insurance companies will offer a discount for bundling your condo and auto insurance policies.

Some insurers also offer discounts for buying a brand-new condo, for being a senior citizen, and for belonging to certain groups. And if you’ve had the same insurer for a long time, you might qualify for a loyalty discount.

3. Research each company you’re considering

When you’re looking for condo insurance, research each company you’re considering. Look at online customer reviews on Trustpilot, the Better Business Bureau, or another review site you trust.

Look for recurring customer complaints. For example, do customers repeatedly complain about a slow claims process? It’s also helpful to see how companies respond to customer complaints.

You should also check out a company’s AM Best rating, which scores insurers based on their financial strength. J.D. Power scores and the NAIC Complaint Index give additional insight into a company’s reputation.

4. Compare multiple quotes

Compare quotes from at least three different condo insurance companies before settling on a policy. Remember that insurers grade each consideration differently. The quotes you receive can vary dramatically from one insurer to the next. Comparing multiple quotes will help you find the best policy for your situation. It’s also a good idea to ask friends and family which companies they’ve used and been happy with.

Best condo insurance FAQs