Condo Insurance (also known as an HO-6 insurance policy) is a policy purchased by the condo owner. This type of insurance covers the policyholder’s personal belongings and the interior of the condo from a loss, including one that might make the condo uninhabitable.
Many condominium communities require property owners to obtain condo insurance. In addition, if the condo has a mortgage, condo insurance will be required by the lender.
What Does Condo Insurance Cover?
Condo insurance offers protection for condo owners from typical losses such as fire, theft, and vandalism. The policy also includes coverage for personal injury lawsuits against the policyholder. However, a condo insurance policy is different from regular homeowners insurance because it only covers the interior sections of a home.
This type of policy is frequently called “walls-in” insurance since it does not cover common areas of the condominium community. Some of the areas covered by these policies include:
Personal Liability Coverage
If a visitor to the condo is injured and the condo owner is at fault, personal liability coverage can help pay the visitor’s medical bills in addition to helping cover any possible legal expenses. An example might be if a loose board causes a guest to fall down the stairs. The defect makes the homeowner at fault.
Guest Medical Coverage
Guest medical coverage, often called “goodwill coverage,” is different from personal liability coverage. This type of coverage protects the policyholder from an injury or illness sustained at the property that the policyholder could not have caused or prevented. An example might be if a guest is injured from falling down the stairs after tripping over their own lose socks.
Building Property Protection
Building property protection covers the condo’s interior, should a covered peril damage the walls, cabinetry, fixtures, tiling, and any permanent fixture like a built-in bookcase. Depending on the condominium association’s governing rules, condo insurance may be needed to cover any specific alterations and installations to the condo.
Personal Property Coverage
Personal belongings like electronics, clothes, appliances, furniture, and any moveable goods are typically included in personal property coverage. Should the policyholder’s property be stolen or damaged, personal property coverage can help cover the replacement or repair costs for a covered claim.
There are different types of personal property coverage available that will determine how much the policyholder can be reimbursed for a covered claim:
- Actual Cash Value covers the replacement cost of property less the depreciation of the damaged or stolen items in a claim.
- Replacement Cost Coverage helps reimburse the difference between the actual cash value and the amount paid to repair or replace the property. Depreciation is not taken into account.
Condo Association Coverage
A condominium association will have its own insurance policy, often called the master policy, that typically covers the building and common areas. This generally includes hallways, elevators, the roof, swimming pool, common rooms, and similar areas.
Because there are many different condo associations and many variations in insurance policies, we recommended condo owners read their specific association’s bylaws and what is and is not covered in the master policy.
Additional Condo Insurance Protections
Aside from standard condo insurance policies, there are additional protections that can be covered with optional coverage. Some of these optional protections include:
Loss Assessment Coverage
In certain situations where damage is caused in a common area, a condo association may issue a special assessment on homeowners. For example, if a fire causes damages in a community’s common area, the homeowners association may require each condo owner to share the expenses of the repairs. When the homeowners association divides the costs of such repairs among all owners, condo loss assessment coverage can help cover these costs.
Flood damages are rarely covered in standard condo insurance policies. Typically, flood insurance can be purchased through the National Flood Insurance Program. Flood insurance covers the contents of the condo like clothes, furniture, and anything that is not a part of the building. Many mortgage lenders require homeowners to buy flood insurance to be eligible for a loan.
An umbrella insurance policy (sometimes called an excess liability policy) provides additional limits to an already active liability insurance policy. This type of personal liability insurance covers condo owners should they lose a lawsuit that exceeds their policy limits.
If a condo owner is sued for damages caused on their property, an umbrella insurance policy is a cost-effective option to protect the homeowner from unexpected liability losses.
Personal property coverage typically has a limit when there is a loss. An insurance endorsement (also called a “rider”) is a change to the policy that adjusts coverage limits. Adding an endorsement usually means adding or modifying coverage.
For example, while standard condo insurance will cover the theft of items like jewelry, expensive collectibles, or electronics, there is a maximum amount the policy will pay in the event of a loss. An insurance endorsement can add extra coverage for these expensive belongings.
Because not everyone’s needs are alike, homeowners should work with their agent to ensure all of their needs are properly covered by their policy.
ABC Dennis Insurance
ABC Dennis Insurance is an independent insurance agency established in 1997 that provides condo insurance as well as all insurance types to its customers. If you have not reviewed your insurance coverages recently, please call our office at (813) 949-7765 or email us.
We can help with all your insurance needs. As an independent agency, we find the best insurance coverage with the most competitive rates.