By: Corin Cook on February 4th, 2022
Everything You Need to Know About Condo Insurance
Individuals & Families | Condo Insurance | Learning Center | individuals and families
If you live in a condo, you may be aware that your home is covered under your condo association’s HOA policy. But did you know this policy likely only covers your condo’s building, grounds, and external features; nothing inside?
If there were an incident such as a fire, storm, or theft, your possessions would not be covered unless you have a separate condo insurance policy.
When it comes to protecting your home, condo insurance is different and more complex than renters or homeowners insurance, so don’t feel bad if you’re confused about what you need. We get it!
At Berry Insurance, we’ve navigated the condo insurance process thousands of times, so we can help educate you understand the types of condo insurance, and what you need to be fully protected.
What is condo insurance?
Condo insurance serves to protect your condo and its contents from any disasters or theft.
When you live in a condo, you are covered in two different ways by separate policies: a master condo insurance policy and an individual condo insurance policy.
Depending on the situation, some claims will be covered by the master policy, some will be covered by the individual policy, and some claims could involve a combination of both.
Master condo/HOA insurance policy:
Every condo association has their own master insurance policy (included in your HOA fees), which covers damage to the condo’s building, grounds, and outdoor features. This policy could either be an “all-in” policy, or a “bare-walls-in” policy.
All-in: Also known as a single-unit policy, an all-in policy covers condo features including attached appliances, wiring, plumbing, and carpets in your condo. Think of this type of policy as covering everything in your condo that you do not own and would be leaving behind if you were to move.
Bare-walls-in: This type of policy does not cover anything within your walls, whether you own it or not. It does not cover appliances or carpets and may or may not cover plumbing and electrical units.
Whether or not your condo provides an all-in or a bare-walls-in policy, you will need to buy an individual policy to be fully covered, but if you have a bare-walls-in policy, you may need to buy additional coverage to insure appliances and fixtures.
Look to your Condo Association Master Docs:
When you buy a condo, the Condo Association Master Docs (not the master insurance policy) will dictate what are considered common areas, and what type of master insurance policy is offered.
Typically the master insurance policy will look to what the master docs say when a claim comes up. If a unit owner doesn’t have their master docs, most can be found online by going to masslandrecords.com.
Individual condo insurance policy:
The individual policy is the policy you are responsible for as a condo unit owner. In many cases, your mortgage lender or condo association will require you to purchase a policy. It is not always required, but is always recommended for property and liability protection.
An individual policy comprises several components (some optional):
Personal Property: Covers the costs of the possessions in your condo if they were damaged or destroyed.
Personal Liability: Covers damages if someone else is injured on your property.
Personal Injury: If added on to the policy, this covers legal costs for libel or slander claims against you.
Loss of Use: Usually included, loss of use covers cost of living (hotel stays, ordering food from restaurants, etc.) if you were to be displaced due to home damage.
Loss Assessment: If a common area in the condo is damaged, the condo association may perform a “loss assessment” on every tenant in the condo, asking them to pay a certain amount to repair the damage. Loss assessment coverage, which is generally included in a policy, covers the cost the condo association deems you responsible for.
What individual condo insurance covers:
A condo insurance policy generally covers everything within the condo, including:
- Interior walls
- Wiring and plumbing
- Light fixtures
- All other possessions
These items are covered in scenarios including:
- Storms (hurricanes, tornadoes, wind, earthquakes)
What isn’t covered by condo insurance:
Depending on your specific carrier and policy, your condo insurance may not cover everything, or may include limits on certain items.
For instance, most condo policies do not cover mold removal, unless the mold is the result of a covered situation. For example, naturally occurring mold is not covered, but mold as a result of a burst pipe may be covered.
Flooding is also not covered under condo insurance because flood insurance is a separate policy you need to purchase if you want coverage for flood-related damage.
Some policies may include limits on items such as jewelry, art, and other valuables.
For example, condo insurance policies might limit your jewelry coverage to $1,000. If you have $10,000 in jewelry that was stolen, $9,000 worth would not be covered.
If you’re familiar with homeowners or renters insurance policies, it works the same way.
If you want to ensure full coverage for any jewelry, art, collectibles, and other valuables, you can schedule them, securing extra coverage for them.
How Much Condo Insurance Should I Have?
Once you understand what condo insurance covers and why you need it, your next question is probably, “How much insurance do I need to get?”
The answer is simple. If you want full coverage, you should make sure your policy covers the cost of all your possessions.
To figure this out, you don’t need to execute an exact calculation. Just roughly estimate the value of your possessions, overestimating to ensure full coverage.
However, it doesn’t hurt to make a detailed inventory so you have a record of your items in case you do need to file a condo claim.
For items with any exclusions, such as jewelry, you will need to purchase extra coverage to cover the value of all your items.
It's also important to note: recently we've seen some mortgage lenders requiring condo owners to carry at least 20% of the condo's purchase price in personal condo insurance. That means if you bought your condo for $300,000, you might need to have a condo insurance coverage limits of at least $60,000.
How much does condo insurance cost?
Condo insurance costs can vary depending on building factors (such as age, materials, etc.) as well as the coverage amount you decide to purchase based on the value of the possessions you own.
Somebody with valuable jewelry, fine, art, etc. will pay much more for condo insurance than someone with minimal valuable possessions.
Some insurance companies also offer a discount is the master insurance policy and the unit owner policy are both with the same insurance company.
Expect to pay roughly $200 to $1,000 per year for an individual condo insurance policy.
Get your condo insurance:
Condo insurance can be confusing and can vary greatly depending on your situation and the insurance carrier you purchase with. An insurance agent will be able to help you get the right insurance for your circumstances.
Berry Insurance agents have helped thousands of clients get the coverage that best meets their needs and we can help you too.
We can also help you find ways to save on your insurance, including bundling your condo insurance with your auto policy.