Does condo insurance cover theft?
Yes, condo insurance typically covers theft. HO-6 insurance covers losses from named perils, so check that theft is covered before purchasing a new policy.
Just bought a condo? There’s a special homeowners insurance policy just for you.
Condo insurance, also called HO-6 insurance, is a type of homeowners insurance specifically for condo and co-op owners. Condo and homeowners associations and mortgage lenders typically require HO-6 coverage, so if you’re thinking about buying a condo, you’ll want to factor this into the cost.
Condo insurance covers your condo’s interior and some fixtures, your personal belongings, and your liability as a property owner. Policies list covered events and perils, like burglary, fire, and windstorms.
Here’s what you need to know about condo insurance, master condominium policies, and additional coverages.
What is condo insurance?
Condo insurance is home insurance for condo owners, with a notable difference: You’re not insuring the entire structure yourself. The condo or homeowners association (HOA) master insurance policy covers many shared assets a typical homeowners insurance policy would cover, though owners contribute to shared costs through maintenance fees or condo association dues.
Condo insurance includes personal property and personal liability coverage within the walls of your condo unit. Additionally, policies can include loss of use and loss assessment coverage.
Most lenders require you to buy condominium insurance if you have a mortgage. HOAs also typically require condo insurance.
Condo insurance vs. HO-6 insurance
Condo insurance and HO-6 insurance are the same thing. HO-6 is the form designation for a condo owners’ home insurance policy. HO-6 insurance covers liability and damage to owners’ personal property and certain building items from perils named in the policy, according to the National Association of Insurance Commissioners (NAIC).
Condo insurance can cover liability claims, damage to condo fixtures and personal belongings, and living expenses if a covered peril forces you to move out temporarily.
Do HOA master policies cover condo owners?
HOA master policies don’t entirely cover individual condo owners. Master insurance covers general HOA liability and damage to common areas, not condo owners’ personal liability or belongings. Some master policies include coverage for interior features like counters, floors, and cabinets, but most don’t cover any part of the condo interior, according to the Insurance Information Institute (Triple-I).
A condo association’s master policy isn’t sufficient coverage to protect your condo, and most condo associations and lenders will want you to protect your unit with condo insurance. Going without condo insurance means zero personal property coverage after fires, burglaries, or natural disasters.
What HOA master policies cover
Your building’s master policy covers two risk areas: damage to common areas and general liability. Common areas you’d see in a master policy include:
Roof and exterior walls
Stairs and elevators
Basement and boiler
Walkways and hallways
Lobby and grounds
Fitness center and pool
Community rooms
Some master policies cover interior features, so check with your HOA to find out which losses it covers. Here are the three types of HOA insurance:
All-in coverage insures the building and fixtures, so owners are responsible only for personal belongings.
Bare walls coverage insures shared areas but not interior walls and fixtures.
Single entity coverage insures common areas, fixtures, and any originally built structure.
Liability insurance protects the HOA if someone is injured in a common area. It covers legal fees and medical expenses.
HOA master policies protect losses only from covered perils, which include fire, lightning, wind, weight of snow or ice, smoke, and vandalism.
What condo insurance covers
You’ll need condo insurance to protect your home and personal property. A standard policy covers property damage from covered perils and personal liability and typically includes these coverages:
What condo insurance doesn’t cover
Condo insurance doesn’t cover everything, so here are situations when you won’t have coverage:
Additional condo coverages to consider
You can explore extra coverage if a standard policy doesn’t offer enough protection. Disaster insurance may be important or even required if you live somewhere with a high risk of certain natural disasters. These are some additional coverage options:
Flood insurance: A condo insurance policy never includes flood coverage. You can purchase flood insurance through the National Flood Insurance Program or certain private insurers. Condo owners with a federally backed mortgage and living in a flood zone are required to buy flood insurance.
Earthquake insurance: Standard policies don’t cover earthquake damage. Coverage is available as an add-on or separate policy from private or state insurers, like the California Earthquake Authority.
Umbrella liability: Your standard policy includes some liability coverage, but you can get more through an umbrella liability policy. This will help protect you if you’re concerned a lawsuit could wipe out your financial assets.
Water backup: This covers water damage from sewer, septic, and drain backups not caused by flooding, like from clogged pipes. You can get coverage as an extra policy or add-on.
Floater: This protects specific valuable items, like jewelry and art, if your condo insurance policy doesn’t entirely cover them. It usually requires a professional appraisal.
Cost of condo insurance
Several factors affect condo insurance rates, including state laws, location, and coverage amount. The national average annual condo insurance premium is $1,426. Condo insurance premiums vary between insurers, so it’s generally good to get a condo insurance quote from multiple companies to find the best policy.
The following table shows average monthly rates for condo insurance with $200,000 and $300,000 in dwelling coverage.
Factors that affect condo insurance rates
Numerous factors affect condo insurance rates. The size, condition, and age of your condo influence your insurance rates since they affect the replacement cost if you have to repair or rebuild.
Personal factors matter, too. Your claims history and credit history, as well as the coverage limits and deductible you choose, all affect your condo insurance premiums. Location and risk level factor significantly into condo insurance premiums since high climate risks can lead to expensive damages and claims.
Condo insurance cost by state
Location is one of the most significant factors affecting condo insurance rates. State laws, the local insurance market, and regional natural disaster risk affect premiums, which can shift from one ZIP code to the next. Average annual rates range from $538 in Vermont to $6,451 in Florida. Rates shown below are for policies with $200K in dwelling coverage.
Just as with homeowners insurance, weather and disaster risks in a state can affect the cost of condo insurance. For example, the states with the highest annual average rates for condo insurance also have high homeowners insurance rates, largely due to their exposure to severe storms that can cause property damage.
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How much condo insurance do you need?
Insurance companies recommend purchasing enough coverage to completely rebuild or repair your condo and replace your belongings. This could include multiple insurance policies if you live in a disaster-prone area.
When you shop for condo insurance, you’ll have to choose between actual cash value (ACV) and replacement cost value (RCV) coverage. The ACV is the amount needed to fix your condo minus any decrease in value from age or use. The RCV is the amount to repair your condo at today’s supply prices or replace your belongings at today’s cost.
For example, say your TV is stolen or damaged in a covered event. ACV coverage reimburses you for the current, reduced TV price, taking the item’s age and use into account. RCV coverage reimburses you for the cost of replacing your TV with a similar one today.
RCV coverage typically costs more than ACV coverage. Creating an inventory of your possessions with their values will help you figure out which is right for you and whether the increased premiums are worth it.
How to save on condo insurance
Condo insurance premiums can vary by hundreds of dollars, so these are some ways to save:
Increase your deductible. A higher deductible means lower premiums. If a covered peril damages your condo, you’ll have to cover more up front, so be sure that aligns with your finances.
Bundle insurance policies. Some companies offer discounts of 5%–15% for bundling home and auto policies, according to Triple-I.
Maintain good credit. Insurers in most states use credit history to inform how they set your premiums. Paying bills on time and keeping a low credit card balance will help you have a good credit record.
Compare condo insurance quotes. Ensure you’re not paying for coverage you don’t want or need. Shopping around will help you find the best prices, policies, and coverages.
Condo insurance FAQs
Here are some answers to commonly asked questions about condo insurance. If you have questions while you shop, speaking with a licensed insurance agent can help.
What type of homeowners insurance policy does a condominium typically require?
Condo associations and mortgage lenders typically require condo owners to purchase an HO-6 insurance policy. It covers the condo interior and certain fixtures, personal property, and liability.
What is the difference between HO-3 and HO-6 insurance?
HO-3 insurance is the most common type of homeowners insurance. It insures against all risks except those excluded in the policy. HO-6 insurance is written specifically for condo and co-op unit owners and covers only the risks named in the policy.
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Data Journalist
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