CONDOMINIUM INSURANCE: Coverages and Policies In 2022

condominium insurance
HPM Insurance

If you own a condo, your homeowner association will cover exterior damage in the event of a disaster. They will not, however, cover any damage to the interior of your condo or your belongings. That’s where condo insurance comes in: condominium insurance (HO-6 policy), also known as walls-in coverage, protects everything within your unit. The best condominium insurance firms were ranked by Businessyield based on affordability, customer happiness, and financial soundness.

What Is Condominium Insurance?

Condominium insurance is comparable to homeowners insurance and renters insurance, but it is specifically created for condominiums. While your homeowner association is usually responsible for any damage to the outside of your building, you are responsible for any damage to the inside of your unit.

Condo insurance protects your belongings, including appliances, personal belongings, and the apartment itself. It can cover damage from a variety of sources, such as fire and smoke, vandalism, lightning, and more. While you may believe you are adequately protected by your HOA’s master policy, it is still necessary to ensure everything inside your unit prevents damage.

What is an HO-6 Policy?

Another phrase for condominium insurance is an HO-6 policy. Condo insurance and HO-6 insurance are commonly used to refer to the same insurance policy. Basic home insurance is an HO-3 policy, renters insurance is an HO-4 policy, and comprehensive homeowners insurance is an HO-5 policy in the insurance market.

The Top 5 Condominium Insurance Companies in 2022

Understanding your needs and comparing quotes are essential steps in locating the finest condo insurance company. Bankrate considered aspects such as coverage options, pricing, availability, and third-party scores from companies such as J.D. Based on our study, we partnered with Power and AM Finest to identify the best firms. However, keep in mind that your needs are unique to your scenario, therefore the finest condo business for you may vary.

#1. State Farm Insurance

State Farm’s regular condo plans include all of the fundamental coverages that most people require, as well as an excellent array of supplemental coverage options. If a thief makes a fraudulent transfer from your account or you unintentionally receive a counterfeit bill, counterfeit money and forgery expense protection can reimburse up to $1,000. Refrigerated products coverage can assist pay to replace damaged food in your refrigerator or freezer in the case of equipment failure or a power loss.

#2. Erie

The condo insurance in Erie is very basic, however, they feature some outstanding optional coverage types. These include debris disposal coverage and lock replacement coverage, which pays up to $250 to rekey or replace locks following a crime. Following a covered loss, your Erie policy may also cover temporary repairs to prevent more damage. Erie Insurance also includes a one-of-a-kind feature that covers the expense of emergency first aid for humans or dogs.

#3. Hippo

Hippo is a relatively new brand, but it’s worth investigating for condo owners. There are numerous condominium insurance policy options, including coverage for home office equipment, water backup, equipment malfunction, and valuables. You could also save money on your policy by requesting a quote eight or more days before your desired effective date, living in an HOA neighborhood, being mortgage-free, or purchasing a new condo. Hippo Home Care may also assist you with routine maintenance, which can help prevent damage before it occurs.

Why Do You Need Condominium Insurance?

While you may believe that your homeowner association covers damage to your condo, this often only covers the exterior of your building and any shared-use spaces. Nothing inside your condo is insured by your homeowner association and requires separate condominium insurance coverage. Condo insurance covers the following:

  • The unit has been physically damaged.
  • Personal belongings
  • Medical payments and liability
  • Coverage for loss of use
  • Condo loss evaluation

In some situations, you may be able to supplement your condominium insurance with additional coverage. If you have exceptionally valuable property, you may want to obtain additional coverage to protect it. If you reside in an area prone to floods, earthquakes, or other natural disasters that aren’t covered by your current policy, you may want to consider adding additional coverage.

What Does Condominium Insurance Cover?

A typical HO-6 condominium insurance policy contains the following coverages:

#1. Dwelling coverage

This section of your HO-6 policy covers specific hazards such as fire and lightning, wind and hail, vandalism, and so on that cause damage to structural components of your unit’s interior but are not covered by the building’s master policy. Walls, floors, windows, and any attached fixtures or components such as kitchen cabinets, built-in bookcases, and bathroom fittings may or may not be included. To ensure you have adequate coverage for the structure of your unit, request a copy of the building manager’s or owner association’s master policy, which specifies which structural features of the unit are the responsibility of the management or HOA. The level of coverage varies.

#2. Personal property coverage

This safeguards your belongings, including clothing, furniture, gadgets, appliances, cookware, jewelry, and so on. In general, you should select a quantity of coverage equivalent to the value of your things. Your insurer will decide claim amounts in one of two ways, depending on the policy:

  • Actual cash value: Pays you the current cash value of your item(s), less depreciation.
  • Replacement cost coverage: Replacement cost coverage reimburses you for things of the same or equal worth at the current market price.

#3. Personal liability coverage

If someone is injured in your apartment or you accidentally damage their personal property and are found legally liable, this coverage will cover your legal fees as well as their medical bills. Depending on the insurer, liability limitations often range from $100,000 to $500,000. If your assets are worth more than that, you should consider purchasing an umbrella insurance policy to provide further protection.

#4. Extra living expenditures

If you are unable to reside in your condo while it is being repaired or rebuilt, your condominium insurance policy will cover expenses such as hotel stays and restaurant meals. This is also known as loss-of-use coverage.

Other condominium insurance coverage alternatives

Your insurance carrier may also provide supplementary coverage in addition to regular coverage. These are some examples:

  • Coverage for loss assessment. If a claim filed on behalf of the master condominium insurance policy exceeds the coverage limit, such as fixing the building’s roof after a hailstorm, the excess cost may be passed on to the unit owners. Loss assessment coverage will reimburse you for your portion of the expense up to the coverage level of your policy.
  • Water harm. Water damage caused by backups or overflowing in a sewer line or drain is not covered by condo insurance. This supplementary coverage will assist in the payment of damaged or destroyed property.
  • Seismic activity or flooding: If you reside in a high-risk location, you may need to obtain insurance that covers these types of events explicitly.

What Isn’t Condominium Insurance Covered For?

Condo insurance does not cover certain perils, hazards, and obligations. These are some examples:

  • Normal deterioration
  • Infestations of termites
  • Common space damage
  • Intentionally causing injury or damage
  • Damage from flooding and earthquakes

What Type of Condominium Insurance Do I Need?

If you have a mortgage and financed the purchase of your condo or co-op unit, your lender will require you to carry condominium insurance. Your HOA or condominium organization may require insurance coverage even if you own your unit entirely.

A number of factors influence how much condo insurance you require. These are some examples:

  • What structural damage is covered by the condominium HOA master policy? Is the master policy only for the fundamentals, such as damage to the walls, windows, and doors, or does it also cover the flooring, ceiling, and fixtures? Knowing what the master policy covers will determine how much dwelling coverage you require.
  • How much money would you need to replace your personal belongings? Experts advocate taking a full inventory of your house contents and calculating how much it would cost to replace everything to decide how much coverage you need for your personal property.
  • Can you cover legal and medical costs if someone is injured in your condominium? If you are found culpable for an injury or property damage that occurred in your condo, you may be held liable for legal and medical expenses. Personal savings, condo equity, retirement accounts, and other assets can be used to offset those expenses. Your liability coverage should be sufficient to protect your assets. Liability coverage limits often vary from $100,000 to $500,000.
  • Can you pay out of your own pocket if you have to live somewhere else while your condo is being repaired or rebuilt? While condo insurance will reimburse you for living expenses while your apartment is being repaired, do you have the means to cover alternative accommodation for a lengthy period of time? Depending on the insurer, loss-of-use coverage is typically limited to 20% of total dwelling and personal property coverage.

What is the Cost of Condominium Insurance?

According to the National Association of Insurance Commissioners 2019 data, the average cost of condominium insurance is $512 per year, the most recent version available. The cost of condominium insurance varies greatly based on where you reside, how much coverage you require, and the deductible you select. Check out your state’s typical condo insurance premium:

StateAverage annual cost
Alabama$559
Alaska$408
Arizona$407
Arkansas$549
California$563
Colorado$431
Connecticut$409
Delaware$445
Florida$997
Georgia$516
Hawaii$325
Idaho$426
Illinois$394
Indiana$347
Iowa$265
Kansas$404
Kentucky$395
Louisiana$765
Maine$349
Maryland$324
Massachusetts$447
Michigan$378
Minnesota$326
Mississippi$617
Missouri$403
Montana$410
Nebraska$358
Nevada$444
New Hampshire$347
New Jersey$457
New Mexico$415
New York$578
North Carolina$502
North Dakota$293
Ohio$312
Oklahoma$655
Oregon$375
Pennsylvania$393
Rhode Island$524
South Carolina$504
South Dakota$303
Tennessee$479
Texas$531
Utah$271
Vermont$354
Virginia$371
Washington$390
Washington, D.C.$377
West Virginia$320
Wisconsin$258
Wyoming$409
Source: National Association of Insurance Commissioners, 2019 data

How to Purchase Condominium Insurance

Many organizations that sell homeowners insurance also sell condo plans. Consider the following companies that are readily available:

  • Allstate.
  • Amica.
  • Chubb.
  • Farmers.
  • Liberty Mutual Insurance Company
  • Nationwide.
  • State Farm Insurance.
  • Travelers.

Condo insurance quotes are typically available on the insurers’ websites or by phoning them directly. If you’d rather not do the homework, you can hire an independent agent to compare quotes for you.

How to Reduce Condominium Insurance Costs

There are three main strategies to save money on condo insurance:

  • Look around. To discover the best price for the condominium insurance coverage you desire, we recommend receiving quotes from at least three insurance companies.
  • Look for bargains. If you combine your condo and auto insurance with the same insurer, you may be able to save money. Some insurers provide savings if your unit has security features such as smoke alarms and deadbolt locks.
  • Increase your insurance deductible. Do not do this unless you are convinced that you have adequate savings to cover the larger sum in the event of an emergency. Otherwise, the decreased premium may be ineffective.

Condominium Insurance vs. HOA Insurance

HOA insurance covers two types of coverage: liability and property. A master policy’s liability coverage can assist pay medical bills and legal fees if someone is injured in a common area, such as a clubhouse, lobby, or swimming pool, but it does not cover injuries experienced by guests within the walls of your condominium.

Condominium management can select from three different forms of property insurance coverage:

  • All-in coverage provides the maximum protection for unit owners because it covers the building of the condo as well as any shared property. It also usually covers changes you’ve made to your apartments, such as bespoke tile and wall coverings.
  • Walls-in coverage, also known as single entity coverage, provides somewhat more protection than bare walls coverage. It covers the structure and systems of the building, as well as built-in features within units such as kitchen cabinets and sunken bookcases.
  • Bare wall coverage offers the least protection to unit owners because it only covers common areas, the building structure, and its systems, such as electrical wiring and plumbing. The interior of your condo is not included.

Before obtaining an HO-6 condominium insurance policy, it is important to understand how much coverage the HOA policy already includes. If your complex has an all-inclusive policy, you may not need much dwelling coverage. However, HOA policy exclusions are significant as well. A master policy, for example, may cover the internal construction of your condo but exclude non-standard fixtures you install, such as expensive imported tiling or a custom stained-glass window.

Condominium Insurance FAQs

What is the difference between HO6 and ho3?

Homeowners with HO-3 and HO-6 insurance have different needs. HO-3 insurance is intended for single-family homes, while HO-6 insurance is intended for condominiums. There are some similarities, such as the fact that they both cover personal property, liability, medical payments, and loss of use.

What is an HO6 insurance policy?

An HO6 insurance policy is homeowners insurance for condominium or co-op unit owners. You own your condo or co-op apartment and are likely accountable for any damage to it.

Is condo insurance more expensive than house insurance?

Because it covers additional hazards, a house insurance policy can easily cost twice as much as a condo insurance policy for the same square footage (e.g. your house, gardener, pool, etc). Because you are only safeguarding a piece of the building, you will pay less for condo owner insurance.

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