Condo Insurance
Insuring a condominium is different than insuring a typical home. Typically the condominium association will have a master policy to cover the entire building’s common areas. However, in addition to the master policy, there is a special form of homeowners insurance designed specifically for condo owners. In the insurance world, this is called an “HO-6 policy.”
The HO-6 cover losses to your personal property from 17 types of perils:
- Fire or lightning
- Windstorm or hail
- Explosion
- Riot or civil commotion
- Aircraft
- Vehicles
- Smoke
- Vandalism or malicious mischief
- Theft
- Damage by glass or safety-glazing material that is part of a building
- Volcanic eruption
- Falling objects
- Weight of ice, snow, or sleet
- Water-related damage from home utilities
- Electrical surge damage.
If a loss is caused by anything other than the named perils, it is not covered. HO-6 typically covers improvements, additions, private balconies, private entranceways, private garages, and other property that is your insurance responsibility under your condo association's guidelines. HO-6 policies also provide liability coverage similar to that found in a standard homeowners policy. If you are found responsible for personal injury or property damage to another person, your HO-6 policy would typically cover you.
If you live in a coastal area or your region is prone to earthquakes, you also might want to consider purchasing separate hurricane or earthquake insurance. Standard HO-6 coverage does not cover damage caused by these events.
The master policy maintained by your condo association is also a vital part of your total insurance coverage. This policy typically covers the common areas you share with other tenants, including the roof, stairways, elevators, and basement. It may cover the structure of individual units as they were originally built, and may cover fixtures in the individual units. It is important to know exactly what the master policy covers, so that you can purchase appropriate individual coverage for your unit and personal property. For instance, if the master policy doesn't cover fixtures in the individual units, you'll want to make sure that your brass faucets and crystal chandeliers are included in your HO-6 policy.
Additional Benefits
Liability protection is standard with most condo policies. This means if someone in your unit slips and falls, you're covered for any costs, up to your liability limit. If this person sues you, you're covered for what they win in a court judgment as well as your legal expenses, up to your policy's limit.
Lowering Costs
Just like any other type of homeowners insurance policy, your premium for condo owner’s insurance depends on a number of factors: where you live, your deductible, your insurance company, and whether you need any additional coverage. There are some ways you can lower your condo owner’s insurance cost:
- Increasing your deductible (the amount you pay before your coverage kicks in) is one strategy.
- Most insurers offer a discount for protective devices such as smoke and fire detectors, burglar alarms, and fire extinguishers.
- Some insurers might offer discounts to policyholders who are over age 55 and retired.
Condo owner’s insurance can be costly, but it is necessary. The premiums charged for condo owner’s insurance vary widely from company to company, so it pays to take the time to do research and make an effort to find the best value for your insurance dollar.
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