Whether your condo is your home sweet home, or a warm getaway during those cold winter months, you want to know your investment is protected. And let’s face it. A lot can go wrong when it comes to your property—fire, burglaries, hail, windstorms, tornadoes, hurricanes, flooding, the zombie apocalypse, killer bees (okay, maybe not those last two).
Condo insurance can help protect your finances from unexpected events. You know you need it, but you’re wondering, What does condo insurance cover? Or maybe you already have it and want to just double-check you’re covered.
You’ve come to the right place! We’ll explain what condo insurance does and doesn’t cover so you can make sure you have the right protection in place.
What Is Condo (HO-6) Insurance?
Condo insurance, also called HO-6 insurance, covers the interior of your condo, including your personal belongings. It also provides liability insurance in case someone gets hurt while on your property. Similar to a homeowners insurance policy, renters insurance or other types of property insurance, condo insurance pays to replace your stuff if it’s stolen or if your unit is damaged. And if your condo is a second home, the home insurance for your primary residence doesn’t cover your condo. You’ll need a separate policy to protect it.
Protect your home and your budget with the right coverage!
Insurance for your condo also adds an extra layer of coverage on top of your homeowners association (HOA) insurance. HOA insurance only covers the building and common areas and won’t pay for your stuff or interior repairs. Unlike auto insurance, condo insurance isn’t required by state law, but most mortgage companies and some HOAs will require it.
What Does Condo Insurance Cover?
Like home insurance, condo insurance protects your finances from natural disasters that could potentially break your bank. For example, if there’s a fire, once you pay your deductible, your insurance company will reimburse you for the repairs. Or if someone breaks in and steals all your furniture (seriously, how did the thieves even get that leather couch down the stairs?), you’re covered.
Here’s a list of what condo insurance typically covers:
Structural Damage to the Condo’s Interior
The dwelling coverage part of your condo insurance policy covers interior structural damage to things like your flooring, sinks, cabinetry, inside walls, tiles and other permanent fixtures.
Condo insurance will pay to replace your belongings if they’re stolen or damaged. So all the money you invested in furniture, clothes, appliances and electronics won’t be lost.
You’ll need to decide whether you want actual cash value (ACV) coverage or replacement cost coverage (RCV). Actual cash value is a lower level of coverage and factors in depreciation. This means your insurer will only reimburse you for what your TV is worth when it was stolen. So if you paid $800 for your TV 10 years ago, and it’s only worth $200 now, your insurance company will write you a check for $200. Ouch! However, if you opt for replacement cost coverage, the insurance company will pay you enough to buy a brand-spanking-new TV. Nice!
One more thing. If you own expensive items like jewelry, art and collectibles (but not NFTs), they are only protected up to a certain limit. (This is usually around 50% of your dwelling coverage). If you need higher limits to protect that Picasso, you can get an add-on that will cover more expensive items.
Personal Liability Coverage
Liability coverage pays for legal and medical expenses related to injuries that happen on your property. So if someone sues you after an accident, and you’re found liable, you can get help paying for legal fees or court judgments. Liability even protects you if your favorite pooch decides it doesn’t like your neighbor in 5B and bites their arm. Phew! You’re covered!
Additional Living Expenses or Loss of Use Coverage
Additional living expenses coverage—also called loss of use—is another aspect of condo insurance. It helps cover expenses if you’re temporarily unable to live in your condo while it’s being repaired.
Guest Medical Coverage
Typical condo insurance liability coverage (including medical payments coverage) will pay for the medical costs for another person who is injured in your condo, no matter who is at fault. But it won’t cover you. (That’s what your own health insurance plan is for.)
Loss Assessment Coverage
Loss assessment (also called special assessment coverage) kicks in if your HOA insurance policy hits its limits. Let’s say a Category 5 hurricane sweeps through and destroys your entire condo building. Your HOA might require each condo owner to pitch in to cover costs that rise above the HOA master policy limit. With loss assessment, you can get help paying your share.
However, if something happened in your unit that caused damage to other units or even the entire building, you might be forced to pay the entire deductible for the HOA master policy (yikes!)—and these deductibles are not small. Loss assessment coverage also helps with this.
What Types of Events Are Covered by Condo Insurance?
Next, let’s dig into what kinds of natural disasters are covered by a typical condo insurance policy. (Spoiler alert: Flooding damage isn’t covered.)
|Usually Covered||Usually Not Covered|
|Wind and Hail||Floods|
|Vandilism||Injuries to Others that are on Purpose|
|Explosions||Normal Wear and Tear|
|Burst Pipes||Underground Water Damage (Like Sewer Backups)|
|Fire and smoke||Insect, Rodent, and Bird Damage|
Other Condo Insurance Protections
Besides standard condo insurance, you can add some extra layers of coverage if you have a unique situation or just want more protection. So if you’re wondering if your basic policy is, well, too basic, here are some things you can add.
This might be one of the most important add-ons—flood insurance. Many people live in a flood zone but incorrectly assume their standard home or condo insurance will cover them. Nope! Sorry, but only extra flood insurance will make sure you get reimbursed when those flood waters start to rise.
Just like flood damage, your condo insurance won’t protect you when things start to shake, rattle and roll. Thankfully, there’s an earthquake policy add-on you can get if you live in an area that is earthquake-prone.
Replacement Cost Coverage
Replacement cost coverage will ensure you can actually replace your furniture or electronics instead of simply getting a check for their depreciated value.
Identity Theft Protection
Identity theft protection can be added to your condo insurance policy to help pay for legal fees if your identity is ever stolen.
Scheduled Personal Property
If you own pricier possessions, you might want to consider getting scheduled personal property coverage. For instance, if you own a diamond necklace worth $4,000 and your insurance has a personal property limit of $2,000, you would lose the $2,000 difference if you didn’t increase your limits for higher-end items.
Unoccupied (or Vacant) Coverage
If your condo is just a getaway spot and you’re not living there for a period of over 30 days, your insurer might not pay for damage that happens while you’re gone. Unoccupied or vacant coverage (also called second home insurance) will make sure you’re protected throughout the whole year.
Short-Term Rental Coverage
If you rent your condo on Airbnb for short-term stays, you can get short-term rental coverage. It protects your property and gives you liability coverage if someone who was renting from you was injured during their stay.
Water Backup Coverage
If your sump pump explodes and sends water backing up all through your condo, water backup coverage has you covered. This is important because typical condo insurance plans won’t cover this type of damage.
If you’re looking at this list of add-ons and you’re still scratching your head (we don’t blame you), work with your insurance agent to make sure your specific situation is covered.
What Does a Condo Association or HOA Master Policy Cover?
Now that we’ve answered, What does condo insurance cover?—let’s look at what your HOA insurance (also called a master policy) covers. HOA insurance is an overall policy that condo owners help pay for through their HOA fees. It covers common areas like tennis courts, elevators, the lobby and swimming pool, along with injuries that happen in those common areas.
HOA insurance also pays for damage to the exterior of the condo building. So if a tornado rips the roof off your building, HOA insurance would kick in, not your personal condo insurance.
It’s good to know what is covered by your HOA insurance so you can know which gaps you need to fill with your own condo insurance policy. (Ask your HOA for a copy of their insurance declaration page.)
Here are three of the main types of HOA insurance:
Bare Walls Coverage
This policy provides the least amount of coverage (we’ll call it the bronze plan). It protects the structure of your condo building, most of the fixtures and furnishings inside the building’s common areas, and property that belongs to the HOA. Bare walls also covers some structural things for individual condo units but only behind the walls (think insulation, wiring, framing, etc.).
Single Entity Coverage
Single entity is the next step up (the silver plan) and is the most common type. It gives the same level of coverage as bare walls but also covers permanent fixtures inside individual units, things that are outside the walls like cabinets. It’s sometimes called walls-in or studs-in coverage.
All-in coverage is like the gold plan, the highest level of HOA insurance. All-in covers the whole interior of your condo, including renovations and improvements. Basically, any fixture that is built-in to your condo. If your HOA is all-in coverage, you can probably drop dwelling coverage from your personal condo insurance policy.
Do I Need Condo Insurance if I Have HOA Insurance?
You might be asking, Do I really need condo insurance if my HOA has insurance?
Yes, you still do. This is because HOA insurance has limits. It won’t protect your unit or your things. HOA master policies pay for exterior structural damage (the building’s roof) while your condo insurance will pay for interior repairs (floors, walls, etc.).
So even if your HOA insurance policy seems to cover a lot of things—or it’s an all-in policy—you still need your own personal condo insurance.
Get the Right Amount of Condo Insurance
If you’re looking to set up a condo insurance policy to protect your assets, there are a few ways to do it.
You could pull an all-nighter researching endless quotes, rates, deductibles and coverage limits through every single insurance company under the sun.
Or . . . you could work with one of our independent insurance pros who is part of our Endorsed Local Providers (ELP) program. These pros are RamseyTrusted and can help you find the perfect level of condo insurance for your unique situation. You’ll save time shopping around for quotes and will also have peace of mind knowing your condo is actually covered.