How Much Condo Insurance Do You Need?

The amount of condo insurance you need depends on the level of protection you need to cover your condo and belongings, minus whatever coverage your association’s master policy provides.

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Condo owners need to take a few extra steps to figure out how much condo insurance they need compared to someone who owns a single-family home. That’s because your condo owners association (COA) already has a master policy in place that may offer some coverage. And you can also choose from different types of condo coverage that can help protect you against some of the extra costs of condo living.1

Here’s a closer look at how to check the coverage you already get through your condo association’s master policy and how to determine how much extra condo insurance you may need. Comparing home insurance quotes is the best way to save money on condo insurance.

Calculating how much condo insurance you need

Condo insurance isn’t too different from homeowners insurance, but it has a few twists. Consider this step-by-step list to make sure you’re buying the correct amount and types of coverage for your condo unit.

  1. Check with your condo association. Your COA should be able to let you know how much condo insurance you already have under its master policy. You can also ask if you’re required to carry an additional condo insurance policy.2

  2. Reach out to your mortgage lender. Banks or other lenders often have rules in place about how much insurance coverage you need to buy to protect their investment.

  3. Do an inventory of your possessions. It’s a good idea to have a list of all your personal possessions in case you ever need to file a claim. And this list can help you estimate how much coverage you need for your belongings.

  4. Estimate the replacement cost of your condo. An insurance agent or financial advisor can help you estimate this amount. Depending on where your COA’s insurance coverage ends, it’s a good idea to insure your condo for the difference.

  5. Consider how much liability coverage you need. Estimate what you could potentially lose in a lawsuit, such as any savings or other property you own. Most policies start with $100,000 in personal liability coverage, but experts often recommend purchasing more.3

  6. Scope out any additional coverages you might need. A standard HO-6 policy for condo owners doesn’t cover everything, such as flood damage from natural disasters or drain pipe issues. Consider whether you need these add-ons.

  7. Compare quotes from multiple condo insurers. Shop around to compare prices and coverage options to find the best condo insurance for your needs and budget.

How condo insurance works and what it covers

Condo insurance involves two types of policies: your COA’s master policy, which protects the building structure and common areas, and individual condo insurance, which covers the things inside your unit.

Condo owners can’t choose the master policy coverage level, but you can decide on your own condo insurance policy to protect whatever the master policy doesn’t. When choosing how much condo insurance you need, it’s important to consider the different types of coverage for other financial losses, such as personal liability and your belongings.

Here’s a closer look at condo insurance coverage options and what they protect.

What a master policy covers

When you buy condo insurance, you’re buying coverage to fill in the gaps for whatever your condo association’s master policy doesn’t provide. That’s why understanding your master insurance policy is key, so you know what else you need. Your condo association can provide the details, but most master policies are one of three types:

Bare-walls coverage

This type of master policy covers all common areas and the interior walls of your unit. It doesn’t cover any of the cabinets, lighting fixtures, or floor coverings in your unit, even if they’re the original items that the developer put in.

Single-entity coverage

A single-entity policy covers everything that a bare-walls policy covers, plus the original fixtures that the developer included in your unit (or something comparable if your unit has been remodeled). That means if you’ve invested in a lot of upgrades, you may need to buy extra dwelling coverage.

All-in coverage

This type of master policy offers total building property coverage, including any upgrades or remodels you’ve done to your individual unit. It’s the most comprehensive type of master policy available, but it also comes at a higher premium.4

How much condo insurance costs

The cost of condo insurance depends on a number of factors, such as your location, your credit history, and how much coverage you buy. Insurify compared the cost of an HO-6 insurance policy for a condo with $400,000 in dwelling coverage across different states and companies.

The average cost of condo insurance nationwide is $2,357 per year. That cost can vary dramatically depending on where you live. For instance, residents of Florida pay the highest annual costs ($11,767), while Vermont residents pay the lowest ($946).

Here’s how different companies’ condo policies stack up:

Condo insurance FAQs

Choosing the right amount of condo insurance can be tricky. Consider this additional information as you shop for a condo policy.

  • What is the 80% rule in condo insurance?

    The 80% rule says that homeowners should purchase a policy covering at least 80% of the cost to replace a home. It’s better suited to single-family homeowners than condo dwellers, who should instead base their coverage needs on what their building’s master policy doesn’t cover.

  • Is condo insurance required?

    Generally, yes. If you’re still paying off a mortgage, your lender will usually require condo insurance. Even if you have a paid-off mortgage, most condo associations also require you to purchase condo insurance to ensure the building is fully protected, inside and out.

  • How do you calculate dwelling coverage for a condo policy?

    Start with your condo association’s master policy to see what it doesn’t and doesn’t cover within your unit. From there, you can estimate how much coverage you’ll need for your individual condo insurance policy. It can be tricky to calculate, so consulting an insurance agent can help.

  • What types of insurance do condo owners need?

    Condo owners should purchase an HO-6 insurance policy, which offers property damage protection and special coverage types for people owning units in a shared building.

  • How much is condo insurance?

    Nationwide, the average annual rate for condo insurance is $2,357 for a policy with a dwelling coverage limit of $400,000. But residents of some areas, such as Florida, pay a much higher average rate of $11,767 per year.

Lindsay VanSomeren
Lindsay VanSomeren

Lindsay VanSomeren is a freelance personal finance writer living in Suquamish, WA. Her work has appeared with FICO, Credit Karma, The Balance, and more. She enjoys helping people learn how to manage their money better so they can live the life they want.

Lindsay has been a contributor at Insurify since October 2022.

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