Types of Insurance / Homeowners Insurance / How to Buy Insurance for your Condo

How to buy Condo Insurance

Buying insurance for your condo is typically less expensive than purchasing a policy for a single-family house, but it's also more confusing. To optimize your insurance, make sure you know what you're buying and how much coverage you really need.

When you purchase a condominium unit, you don’t have to worry about some of the costs associated with single family homes - such as replacing your roof or land maintenance. Condo associations cover costs for an entire building with a master insurance policy, except that master policy won’t protect your stuff or the renovations you make to your home. Personal condo insurance, also called an HO-6 policy, protects your belongings, assets, and makes sure your home can be rebuilt completely after a major disaster. Your homeowners association (HOA) and mortgage lender could also require that you purchase condo insurance. 

Condo association insurance doesn't protect you or your home.

You need a personal condo policy to rebuild your own home, protect your belongings, and shield you from lawsuits.

Calculate your condo's insurance needs carefully.

How much condo insurance you need depends on how much your HOA policy covers, your home's finishes, and other factors.

Save on condo insurance by customizing your policy

Simple changes, like choosing the right endorsement/riders or picking a higher deductible, can significantly lower your premiums.

What is condo insurance?

Condo insurance or an HO-6 insurance policy is a type of homeowners insurance. However, it typically costs less than homeowners insurance for a single family home because it does not insure the cost to rebuild the entire condominium structure.  

Many components of condo insurance are similar to a standard homeowners insurance policy, but there are a few differences. Condo policies don’t cover “Other structures” like detached garages or sheds because these are usually community property in a condominium building. Homeowners insurance also requires much higher Coverage A, to cover the estimated cost to rebuild your entire home, while condo policies only cover inside walls, floors, and sometimes even less.

Key components of condo insurance

What does condo insurance actually cover

Your condo policy will detail the “named perils” covered by your personal property and dwelling limits. These usually include, but aren’t limited to: fire, lightning, smoke, theft, vandalism, and hail. To check what’s covered, review your perils with an insurance agent or broker, especially if you need to add additional protections.

What doesn't condo insurance cover

No insurance can provide protection against every single scenario, but there are some exceptions for every condo policy. Condo insurance does not cover floods, landslides, earthquakes, wear and tear, sewer backup, and excess valuables. Insurance companies allow you to add coverage for some of these through a rider or endorsement. You can also purchase standalone policies to protect you against flood or cover expensive valuables.

How much condo insurance do I need?

 Condo insurance is usually less expensive than homeowners because it provides less dwelling protection, but figuring out how much you need can be tricky. A few factors determine how much insurance you need; how much your HOA covers, the value of what’s inside your condo, and construction costs in your area. There are common methods for calculating condo insurance quickly, like the 20% method or the square foot method.

Coverage Cat recommends first evaluating the factors below to ensure you’re not over or underinsuring your condo. 

Your HOA or condo association master policy

Your HOA fees go towards many services, like maintenance, repairs, and insurance. A master insurance policy, which condos are required to maintain, covers your building’s structure and any shared common areas. Master policies differ in how they cover individual units and can provide All-in, Single Entity, or Walls-in coverage.  

While your insurance agent can advise you on how much insurance to buy, reviewing your condo policy ensures that you’re not buying too much coverage or not enough. 

The value of your condo

You can imagine that your condo association policy ends somewhere inside your condo's walls. That could include some parts of the walls themselves, but at a minimum includes your personal belongings, your personal assets, and at least some of the condo property. To determine how much coverage you need, consider the factors below.

How to lower the cost of your condo insurance

Can you buy condo insurance for a townhouse?

Whether a townhouse is covered by condo insurance depends on the ownership structure of your townhouse community. If you own the exterior of your townhouse as well as the interior, you’ll need a traditional homeowners insurance policy. Condo insurance will only cover interior damage and can severely limit your protection unless your HOA specifically covers your home’s exterior. To determine whether you need homeowners or condo insurance for your townhouse, carefully review your HOA’s master policy and determine your townhouse community’s ownership structure. 

Frequently Asked Questions

How do I buy condo insurance?

Most companies that offer homeowners insurance also offer condo insurance. To purchase a condo policy, you can shop around with most major homeowners insurance companies or contact an independent agent like Coverage Cat to shop around for you.

How much does condo insurance cost?

Condo insurance costs vary significantly by state, coverage, and a variety of other factors. Some companies estimate that the average condo owner paid from $455 - $511 per year in 2023.

Who offers the best condo insurance?

The best condo insurance company for you depends on a variety of factors. To find your best policy, it's important to shop around and compare offers and coverages, especially if you have multiple policies. Contact an insurance agent or broker, like Coverage Cat, to get a variety of quotes and explain your options.

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