Condo Insurance
(A breakdown of the coverage you need to protect your home)
Written by
Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.
Reviewed by
Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.
So you’ve got yourself a condo, and you’re quickly settling into life as a homeowner. That’s exciting, but before you get too cozy on the couch, you might want to start thinking about the protection your home needs. Like all other homeowners, condo owners face the same major risks on a day-to day-basis. Your home is your oasis and you want to keep it safe. Fortunately, the right condo insurance can do just that. But first, here’s a quick breakdown of this coverage.
What is Condo Insurance?
Regardless of where your particular condo is located, condo insurance is essentially an agreement between the condo owner/renter and an insurance company in which the insurer agrees to cover financial losses relating to damages and liabilities. Only the specific perils stated in the policy will be covered by the insurance company. Condo insurance is designed to help protect owners from losing their home should disaster strike.
How Does Condo Insurance Differ from Homeowners Insurance?
Condo insurance operates very similarly to homeowners insurance, but it’s customized in a way that makes it work for the unique needs of condominiums. Since the actual condominium building itself is owned by the condo association, various stipulations are needed in condo insurance coverage in order to adequately protect the owners of individual units.
The term “condo” is a legal distinction for the type of property, and certain declarations are added to owners’ contracts to dictate what percentage of the “common elements” they’re responsible for. Condo owners are responsible for not only their personal property and their part of the main building, but also a fraction of these common elements (e.g., AC units, pools, etc.) that are considered to be of shared ownership between all individual condo owners.
Obviously, since condo owners have unique responsibilities that other homeowners don’t, such as being partially responsible for common elements, their insurance policy is designed to cater to their needs. An independent insurance agent would be happy to clear up any remaining questions you may have on the difference between condo insurance and homeowners policies.
What Does Condo Insurance Cover?
Since condo owners are not just responsible for their individual unit and personal belongings but also a fraction of common elements, condo insurance is designed to cover all these aspects. Condo owners also need protection for friends, family, and other guests who may visit their home, which means having legal or liability coverage.
The more complex your condo and your individual responsibilities are, the more coverage you may need. But here are the three major coverage areas included in standard condo insurance policies available:
- Dwelling coverage: This condo insurance aspect covers your unit’s structural components like the walls, ceilings, and floors.
- Personal property coverage: This covers your personal belongings like furniture, clothing, electronics, knickknacks, silverware, etc., that are stored within the unit from perils such as fire or theft. This aspect of coverage also protects the building elements you’re responsible for such as toilets, showers, flooring, etc.
- Liability coverage: This covers legal expenses, such as attorney and court fees, in the event you are sued for bodily injury or property damage to a third party. Settlements you’re ordered to pay if you lose the case are covered as well. Coverage extends to all members of the family living within the condo, including pets.
These three components compose the core of condo insurance packages. Working together with an independent insurance agent is a great way to get the right amount of coverage in each category for your unique home.
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What Does Condo Insurance Not Cover?
Like every other kind of insurance out there, condo insurance comes with a list of specified covered perils as well as non-covered perils. Becoming familiar with what your condo insurance policy doesn’t cover can save you the hassle of filing claims that are bound to get denied, and in the event of certain non-covered natural disasters, help you find the right kind of policy to protect your home.
Condo insurance does not cover the following perils:
- Certain natural disasters (i.e., floods, earthquakes, and mudslides)
- Maintenance-related losses
- Wear and tear damage (i.e., failure of the condo owner to maintain upkeep of the home)
- Insect damage or infestations
- Damage from war or nuclear fallout
- Business-related liability
If you run a business out of your home, condo insurance won’t cover any liability-related mishaps. To protect your unit against flood or earthquake damage, you’ll need a flood insurance or earth movement policy. Flood insurance policies are only available through the National Flood Insurance Program, which is a part of FEMA. Condo owners located in areas prone to flooding may want to seriously consider getting a policy.
What are the Benefits of Condo Insurance?
You’ve found a home you love, and it deserves to be protected. Having adequate insurance coverage can prevent a condo owner from going bankrupt and losing their home following a particularly costly disaster. Standard condo insurance packages provide coverage for many common threats to the home.
Condo insurance typically provides coverage for the following perils:
- Theft
- Vandalism
- Explosion
- Fire and smoke
- Water damage
- Aircraft or vehicle damage
- Riots
- Falling objects (and trees)
- Certain natural disasters (i.e., windstorms, hail, lightning, and blizzards)
Your independent insurance agent can help you review your condo insurance policy to answer any remaining questions about your coverage. They’ll also be able to help you figure out whether you’ve got enough coverage, or if you should purchase more.
How Much Does Condo Insurance Cost?
Many factors influence the cost of a condo insurance policy, including the size and location of your condo, the value of the structure and the contents inside, and any upgrades you’ve made. Owners of condos located in areas prone to severe weather or other risks like crime will be required to pay more for their insurance policies than those who live in calmer, safer areas.
While it’s hard to offer an exact figure without knowing your unique living situation, a general range for condo insurance usually falls between $200 and $2,000 annually. Unless you’re buying a particularly expensive unit in a major city, though, you can typically expect to pay towards the lower end of the spectrum for coverage. An independent insurance agent can help find more exact quotes for you.
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Benefits of an Independent Insurance Agent
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