Your Guide to Condo (HO-6) Insurance

How Much Condo Insurance Do You Need?

To figure out how much condo insurance you need, here are a few things to consider. First, take an inventory of all your personal belongings. Create a spreadsheet you can keep somewhere safe (like cloud storage) so it doesn’t get lost or destroyed during a disaster. Take photos and videos of everything you own so you have a record if you ever need to provide it to your insurance company during the claims process.

Next, check what your HOA insurance covers so you’re not buying coverage you already have. Ask your HOA for a copy of their insurance declaration page.

You’ll also want to look at liability limits. Most plans offer a range starting at $100,000 up to $300,000. Research how much you think you’ll need based on assets that could be at risk in a lawsuit. Also look at local construction costs to get an idea of how much it would cost to rebuild your condo.

Finally, if your condo is in a flood zone or an area that gets hurricanes, look into extra coverage. Many Americans believe their standard property insurance policies will cover them in the event of flooding or earthquakes. Not true. A typical condo insurance policy will not—we repeat, not—pay for flood, earthquake or hurricane damage. You’ll need additional flood insurance, earthquake coverage and hurricane insurance. 

Optional Condo Insurance Coverage

Just like the TV commercials tell us (over and over and over . . .), you can customize your insurance. The same is true for condo insurance. If you’re looking at your situation and think you need more coverage, here are a few things you can add to your plan.

Loss Assessment

Loss assessment (also called special assessment coverage) is an extra layer of coverage that kicks in if your HOA insurance policy hits its limits. Say there’s a major disaster. Your entire condo building is mostly destroyed. Your HOA might make each condo owner pitch in to cover costs that are above the master policy limit. Here’s where loss assessment comes in. It can help cover some or all of these expenses so you don’t end up paying out of pocket.

And since we’re talking about bad things that could happen, one more thing: If major damage results from your unit, you could be on the hook to cover the entire HOA insurance’s (large) deductible. For example, let’s say your toddler is playing with the microwave (not good) and accidentally starts a fire (even worse) that spreads to other units (ouch). Your HOA might require you to pay their deductible since it was technically your fault (reason #937 to not let kids play with microwaves).

Replacement Cost Coverage

We mentioned this above, but if you want to make sure you’re reimbursed for the full amount it would cost to replace your 4K UHD 72-inch flat-screen TV, you can get replacement cost coverage.

Identity Theft Protection

Surprisingly, you can even add identity theft protection to your condo insurance. This will help cover lawyer fees if your identity is ever stolen.

Scheduled Personal Property

Want to make sure that Picasso’s covered? We get it. You can buy higher limits for higher-end items like art and jewelry.

Unoccupied (or Vacant) Coverage

If you’re away from your condo for a period of over 30 days, your insurance company may not approve claims for damage that occurred while you were gone. If you’re only in your condo for part of the year, you should look into getting unoccupied or vacant coverage.

Water Backup Coverage

This is exactly what it sounds like—extra coverage in case your sump pump explodes and water backs up in your condo.

Okay, so we’ve seen there are lots of options when it comes to condo insurance. Your insurance agent can walk you through which add-ons might be useful for your situation.

How Much Is Condo Insurance? 

The cost of condo insurance varies dramatically. But the nationwide average yearly premium for condo insurance is $572.¹

Insurance companies base rates on a few factors: where you live, the value and age of your condo, your deductible, coverage amounts and things like your age and credit history.

Here’s a look at the average costs by state so you can get a feel for what you might be paying.

How to Save on Condo Insurance

If you’re looking to save on condo insurance (and honestly, who isn’t?), here are a few tips.

Bundle and save. Bundle and save. Bundle and save. Yep, we’ve heard it only a million times on TV. But it’s true! If you bundle condo insurance with your auto insurance policy at the same insurance company, you could save money.

You might also be able to save a little by installing better safety features at your condo, like deadbolt locks and smoke detectors. Insurance companies reward people with discounts if they take safety more seriously.

Another way to lower monthly premiums is to increase your deductible. Just make sure you have enough savings to cover that higher deductible if you end up needing to file a claim.

How to Get the Right Coverage

Another great way to save when getting condo insurance is to simply shop around. And you could do this on your own—but really, who has time for that? Instead, we recommend using one of our RamseyTrusted® insurance pros who can shop for you to get the best coverage at the best price.

Like your home, your condo is one of your biggest investments. But finding your condo insurance sweet spot can be hard. So many options, so little time! Let a pro shop for you so you can sleep easy knowing your condo’s covered.

Connect with a RamseyTrusted agent today!