Condo Insurance: What It Is, Where to Buy It, and How to Get the Best Plan for You

Many prospective homeowners find that purchasing a condominium unit is the best option for their circumstances. But as with house ownership and rentals, owning a condo comes with its own insurance needs. For condo owners, the best way to avoid major financial losses is through condo insurance. 

Condo insurance is different from most other types of personal insurance in one major way—condo associations. Condo unit owners are most often part of a condo association and subject to rules and regulations laid out by a set of documents setup by the association. Those documents spell out what the unit owner is responsible for insuring, as well as what the association is responsible for insuring. They can vary dramatically from one development/association to another. 

When beginning the process of developing a condo policy, the first thing an insurance agent will ask for is a copy of those documents so that the policy can be set up accordingly. 

Condo insurance covers  an individual condo unit within a larger property. Specifically, comprehensive condo insurance will cover damages or other issues arising in the condo unit itself, instead of issues pertaining to the larger property. A good condo insurance policy will protect condo owners from liability claims/lawsuits, as well as, financial losses in the event of fires, severe weather, theft, vandalism, or other issues that may affect their own individual condo unit but would fall outside of the coverage of any insurance purchased by the property owner or condo association. There are also developments now where single family, stand alone properties are setup as condos. So you can have something that looks like a single family home in every way but is actually a condo.

What Is Condo Insurance and What Does It Cover?

Condo insurance is also known as HO-6 insurance. In this sense, it is similar to the more familiar HO-4 insurance, or renter’s insurance, though there are a few key differences. In addition to being specifically for condo owners, HO-6 insurance also covers a few things that HO-4 insurance does not. While both will cover personal property and liability, HO-6 condo insurance will also usually cover interior installations and finishings that belong to the condo owner but are not part of the larger building infrastructure. 

Many first-time condo owners may not feel as though they need to purchase condo insurance for a variety of reasons. Chief among them is the fact that their condo association will usually have its own insurance policy covering the building or the wider property. Thus, first-time condo owners may get the impression that they already have coverage for any potential financial losses they may face due to damage or theft in their own units.

But this is often incorrect. While larger condo properties are usually insured by the broader condo association, these insurance policies rarely cover financial losses affecting personal property and fixtures in individual units. In the event of damages or losses in a single condo unit, the condo association’s insurance will either provide insufficient coverage or no coverage at all. Thus, the condo owner of the affected unit will be on the hook financially. 

This is why reading the association documentation is crucial. Some associations spell out that the master policy covers the entire structure and all interior furnishings, leaving the unit owner just responsible for their personal belongings and any improvements they make. Others spell out that the master policy is only covering the shell, and the unit owner is responsible for wall coverings/floor coverings and internal furnishings.

Coverage Beyond Your Building’s Insurance Policy

In general, a master insurance policy taken out by the condo association  will usually cover only damages to the basic infrastructure of the building itself. For example, in the event of a building fire, the building insurance will cover damages to the walls, floors, hallways, and support structures. 

However, it is unlikely to cover damages to fixtures in individual condo units (such as kitchen and bathroom fixtures), furniture, and personal belongings. Damage from severe weather, like hail, lightning, or heavy winds, are often covered by the condo association insurance policy, provided the damaged portion falls under the association’s responsibility in the documentation. In these events, condo insurance for your personal unit will serve as an excellent way to gain financial security and peace of mind in the event of significant damages. 

You should, therefore, consider purchasing condo insurance for your condo unit for added financial security. Condo insurance will cover financial losses stemming from smaller fires; damage from fallen trees, hail, or other natural disasters; theft and vandalism; and so on. 

Many condo insurance policies will also cover liability for the condo owner in the event that another person suffers an injury while on the property. Without this type of insurance, you would be on the hook financially for any repairs or liability in the event of an accident of this kind. Thus, you would be smart to invest in a comprehensive condo insurance policy instead of relying entirely on the insurance coverage of your particular condo association. 

What Condo Insurance Does Not Cover

While condo insurance provides excellent coverage for much of your condo unit, note that there are  a few key areas that HO-6 condo insurance usually does not cover. For these areas, you will need separate, self-contained insurance policies on top of your overall HO-6 insurance. 

Floods

As with other types of renter’s and homeowner’s insurance, condo insurance usually does not cover damage caused by floods. Many companies that offer condo insurance do also offer separate flood insurance policies. So if you feel that your condo is at a greater risk of damage due to flooding, consider getting flood insurance on top of your condo insurance policy. 

Earthquakes

Like with floods, HO-6 policies do not usually cover damage to your property caused by earthquakes. If you don’t live in an area where earthquakes are common, this is unlikely to be an issue. However, as with flooding, if your condo is located in an earthquake-prone area, consider adding earthquake coverage to your existing condo policy or getting separate earthquake insurance on top of your HO-6 insurance if adding coverage to your existing plan isn’t an option. 

Termites and other pests

Condo insurers do not usually include property damage caused by termites, rats, or other pest infestations as part of their general policies. While your condo association may provide pest control and extermination for certain types of infestations, you may also have to pay out of pocket for infestations and resulting repairs affecting only your unit.

Normal wear and tear

While condo insurance will cover significant damage caused by fires, storms, theft, and other issues included in the policy, it will not cover the standard maintenance and repairs that go along with living in a place for an extended period. You, as the condo owner, will still be on the hook for smaller repairs stemming from ordinary wear and tear. 

Intentional injury

While HO-6 condo insurance will often cover liability if someone else is accidentally injured in your condo, this policy will not extend to any injury caused intentionally. Of course, you should never intentionally injure someone regardless of the insurance implications. But if you do intentionally harm another person on your condo property, don’t expect your condo insurance policy to cover your liability. 

How Much Condo Insurance Do You Need?

The exact amount of condo insurance that you may need depends on a variety of factors. The most significant of these is the total value of your condo and your belongings contained within the property. You should also take a look at the condo association insurance policy that covers the entire property to see what is and is not covered there. Some condo association insurance policies will provide coverage to individual units in certain circumstances. 

However, many of these policies do not cover things like appliances, jewelry, electronics, furniture, pets, art, or other potentially valuable items. If, for example, you own several expensive musical instruments in your condo, your condo association insurance policy will not provide financial coverage for these instruments in the event that they are destroyed in a property-wide fire. 

Thus, if you are considering purchasing condo insurance, you should get a rough estimate of the total valuation of these instruments and factor that into your decision on how much condo insurance you need. 

The association documents won’t spell out the cost of what the unit owners responsible for covering—only WHAT the owner is responsible to cover. It takes a conversation with an insurance agent to determine cost once the documents are understood.

Factors That Affect the Cost of Your Condo Insurance

Several factors affect how much your condo insurance will cost, including where you live, age of the property, construction type, how much you need covered, and which deductible amount you choose. In terms of the location of your property, condo insurance rates can vary broadly from state to state. For example, as of 2019, the average annual condo insurance rate in the state of Wisconsin was only $258. 

However, during the same year, the average annual rate in Oklahoma was $655. Before purchasing condo insurance, make sure to look into specific laws in your state that may affect how much you pay annually for condo insurance, and what the average annual rate is in your area. 

You may also end up paying more or less for condo insurance depending on how much you need covered. As you’ve previously seen, some property-wide condo association insurance policies will cover claims stemming from fires, storms, or other types of damage if they affect certain parts of individual units. However, this coverage is usually limited to the building’s structure itself (e.g., walls, ceilings, floors, insulation, and so on). 

If you have a large number of valuable items in your condo that are not covered by your condo association’s insurance, the total inventory of the items you would like to cover with your individual condo insurance may affect your annual cost. Finally, different condo insurance policies will have different deductible amounts for you to choose from, which will also affect how much you pay annually. Be sure to investigate different deductible plans, what they cover, and how much you will be paying before going ahead with any condo insurance purchase. 

How to Get the Best Rates on Condo Insurance

When working through the process of purchasing condo insurance,  you should always shop around for different policies so you can compare and contrast prices and coverage. In general, it’s a good idea to see quotes from at least three different condo insurance companies before moving forward with a purchase, since even comparing just three different quotes can give you an idea of the variation between different insurance companies, and how much you might be able to save if you continue to shop around. If you work with an insurance agency, rather than going to each insurance company yourself, an insurance agent can get you the quotes for all three, saving you time. 

If you have other insurance needs, you might also be able to get better rates if you bundle your condo insurance with another insurance policy through the same company. For example, if you own a car, your auto insurance company might also offer condo insurance. In this case, you may be able to bundle your auto and condo insurance into one policy and save money on both. Some companies will not even offer a condo policy stand alone and may require both the condo and the auto bundle to offer a proposal at all.

If your condo property has certain safety features, such as smoke alarms, burglar alarms, leak detection, freeze detection, carbon monoxide detectors, and advanced locks, some insurance companies may offer you discounted rates. Finally, you can get better rates if you buy a plan with a higher deductible, though you will, of course, need to balance this out with the higher risk of a greater financial liability on your end in the event of property damage. 

Things to Consider Before Buying Condo Insurance

Before making the decision to purchase condo insurance, there are  a few things that you should consider. First, what is and is not covered by the property insurance taken out by your condo association? As you’ve previously seen, these property-wide insurance policies will usually cover damages to the building itself, including its basic structure and communal areas. 

However, different insurance policies might provide coverage for different parts of your condo unit, such as plumbing, heating, windows, and so on. Other condo association insurance policies will not cover these things. Therefore, before purchasing your HO-6 insurance policy, it’s a good idea to avoid unnecessary overlapping coverage by checking what in your condo unit already has coverage. Knowing what is already covered, and what you need to cover with an HO-6 policy, will help you save money and avoid hassles in the long term. 

Also don’t base the decision on what the master policy has covered only. Make sure the unit owner policy covers what the association document requires them to cover.

Insurance Requirements

Another major point to consider when looking into HO-6 policies is whether or not such a policy is required and, if so, what your policy needs to include. Many condo associations require individual condo owners to purchase additional HO-6 insurance for their condo units. 

These added layers of coverage will lessen the likelihood of prolonged claim controversies or acrimonious legal fights in the event of a major incident such as a fire or severe storm damage to the building. Before purchasing a condo, check in with your potential condo association to see if it requires condo insurance and, if so, what that insurance needs to cover. 

In addition to the requirements set forth by condo associations, many mortgage lenders also require condo owners to take out HO-6 insurance on their property if the owners have a mortgage through them. This provides an extra layer of liability coverage for the mortgage lender. 

As such, mortgage companies usually require, at minimum, that condo units be covered for fires and natural disasters. If you are thinking about getting a mortgage loan for your condo unit, check in with your mortgage company to see if it requires HO-6 insurance to approve a loan, and what that HO-6 insurance should cover in the unit. 

Your Financial Security

Something else to consider is how much money you have saved away for an emergency. This will help you determine how high the deductible should be for your HO-6 plan. Plans with higher deductibles will usually cost you less annually, but they will leave you on the hook for a bigger financial loss in the event of damage to your unit. If you feel confident that your savings are enough to cover the deductible in the event of a fire or other types of property damage, you can feel more confident in saving money on your condo insurance policy by getting a plan with a higher deductible. 

On the other hand, some companies may require higher premiums if your condo building is located in an area that comes with an increased risk of property damage. For example, if your condo unit is located near the ocean, your condo insurer might require higher rates to cover the increased risk of tropical storm damage. 

What Needs to Be Covered?

Finally, before moving forward with a condo insurance policy, it’s a good idea to take stock of all of your personal belongings. What are the most valuable items contained within your condo? What are the least valuable and most replaceable? What is most likely to be damaged in the event of a fire or severe storm? 

In addition to this being a good idea in general, your condo insurer will likely want an inventory (possibly with pictures included) of the items within your condo, as well as their approximate value. Having a clear picture of what you do and do not wish to insure within your condo is an important step toward purchasing HO-6 insurance for your unit. 

a street of condo's lined up next to one another.

How to File a Claim With Your Condo Insurer

As with other types of insurance, the process for filing a claim with your condo insurer is  relatively straightforward. The process will be even easier if your policy comes through a reliable and efficient insurance company. In general, the exact process that you will need to go through if you have to file a claim will vary depending on the exact circumstances. However, in most cases, the following steps will apply. 

Depending on the nature of the incident, you may need to  first file a police report. This is especially true if your claim involves a crime (such as theft or vandalism by a third party) or an injury that occurred on your property. Once any legal issues are taken care of, you should contact your insurance company as soon as possible. Your plan documents should provide you with all the necessary contact information for filing a claim. 

Depending on the company through which you bought your insurance policy, you will likely be able to file your claim over the phone or online. Before contacting the company, or soon after, it’s a good idea to get photographic or video documentation of the damage, as many insurance companies will want visual evidence to go along with any claim. 

Once you file your claim, your insurer should give you a claim number for future reference. In many cases, your insurer may want to take an official statement from you on what exactly happened and the extent of the damage. 

Tips for Reducing the Risk of Damage or Theft in Your Condo

The steps you should take to reduce the risk of damage or theft in your condo unit are, more or less, the same common-sense principles that will apply to all homeowners and renters. For things like fires, it’s always a good idea to have  several smoke detectors in key areas around your condo and to regularly check them to ensure they are still working properly. Your condo association might provide these for your unit, but you should always check to see if you have adequate fire alarms and protection instead of relying too heavily on your building’s management to do it for you. 

If your smoke detectors are all up to standard, the rest of the process merely involves practicing basic fire-safety precautions. Be careful when using open flames, and keep fire and hot electronics away from flammable things like curtains or blankets. If you have several electronics, pay attention to how many you have plugged in at once in one electrical outlet. 

In terms of  preventing theft and break-ins, you should invest in reliable burglar alarms and advanced locks in your condo unit. Again, these might be provided by your condo association, but it’s never a bad idea to give yourself an added layer of protection if your building’s security systems are inadequate. 

Additionally, many condo properties employ a team of security personnel. You should get to know your building’s security team, learn what steps it takes to prevent theft and break-ins, and find out how you can contact the team if you feel you may have an unwanted intruder. 

After that, you can further prevent theft and break-ins by simply practicing good sense. Don’t leave windows open. Don’t leave valuables out in the open. Don’t invite strangers back to your condo. It is also a good idea to take a solid inventory of your condo’s valuables. In addition to being necessary for any condo insurance claim, this will help you identify if anything has been stolen or damaged by a burglar. 

In general, practicing good fire safety and common sense will help you protect your condo from damage and loss due to fires, theft, and other incidents. But even if the unthinkable does happen, your condo insurance policy will help you navigate the financial hit and provide you with peace of mind that you can’t get anywhere else.

Condo Insurance Near Me

If you are considering buying a condo unit near Evansville, Indiana,  Torian Insurance Group is your one-stop shop for the best condo insurance policies from the best local agents in your area. Regardless of the size of your condo, the worth of your valuables, or the policies of your condo association, check out Torian Insurance to compare and contrast different condo insurance policies and find the best ones for you!