Skip to main content

Condo Insurance: What It Covers & Why It’s Important

Condominiums

Understanding Condominium Insurance

Condominiums are unique because owners have individual units but share ownership of the common property through an association. This means owners are both stakeholders in the building and residents of their units.

Though we’ll focus on residential condominiums, it’s important to note that condos can also serve as rentals or commercial spaces.

Condo insurance, also known as HO-6 insurance, covers personal belongings, unit interiors and liability for injuries on your property. It complements the master condo policy that covers the building structure and common areas. Condo owners should review the master policy to understand what’s covered and what’s not.

What Does Condo Insurance Cover?

  • Dwelling coverage: Protects interior elements not covered by the master policy, often times the drywall in, including paint, flooring, cabinets, fixtures, etc.
  • Personal property: Covers belongings like furniture and electronics, with options for actual cash value or replacement cost.
  • Liability coverage: Protects against legal and medical costs if someone is injured in your unit.
  • Additional living expenses: Pays for temporary housing if you can’t live in your unit due to repairs.

Optional & Additional Coverages 

  • Loss assessment: Covers your share of expenses if a common area repair exceeds the master policy limits.
  • Water backup: Covers damage from sewer backups.
  • Flood and earthquake: Available if you live in high-risk areas.
  • Short-term rental: Protects your unit when rented to others.
  • Personal umbrella: Adds extra liability coverage beyond standard policy limits.
  • Valuable article: Many policies limit, or do not provide coverage, for jewelry, artwork and other high valued items or collections.

What Condo Insurance Doesn’t Cover 

It doesn’t cover normal wear and tear, flood/earthquake damage, termite infestations or damages to common areas.

How Much Condo Insurance Do You Need?

  • Dwelling coverage: Based on what the master policy doesn’t cover.
  • Personal property: Based on the total value of your belongings.
  • Liability: Most condo insurance policies have at least $100,000 in coverage, but you may want to have more than that. It’s recommended that you have enough liability coverage to at least cover your assets.

How Much Does It Cost?

Several factors affect the cost of condo insurance, including the unit’s location, condition and coverage needs. Comparing multiple providers quotes from your Robertson Ryan Agent, can help you assess and find the right coverage.

Why Condo Insurance Is Becoming Harder to Get 

Many in the insurance industry report that condominium insurance is becoming more difficult to obtain. Prices are rising, terms are stricter and underwriting requirements are more challenging.

A Hard Market 

We are in a hard insurance market. During hard markets, premiums rise, coverage tightens and insurers pull back from high-risk policies. This happens when companies see losses or declining profits and take steps to protect themselves, like reserving more money for claims or reducing risk by limiting policies.

Aging Buildings & Maintenance 

Many condominium buildings are aging, and deferred maintenance has become a serious issue. Associations often struggle to fund necessary repairs since they rely on owner fees, which can lead to maintenance delays.

When buildings age without proper maintenance, insurance companies react. They may increase premiums, reduce coverage or even non-renew policies if they consider the risks too high. Sometimes, they offer conditional renewals, requiring repairs before renewing the policy.

What You Can Do When Searching for the Right Condo Insurance 

Create an inventory of your belongings and compare quotes from several insurer carriers your Robertson Ryan Agent provides. Please consider and discuss any additional coverage needs and deductible amounts with them. If you have any questions, please reach out to your Agent or find your New Agent.