Condo Insurance Coverages
(Let's take a closer look at the protection your condo needs)
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 to satisfy the joys of homeownership while maintaining a lower risk factor. That’s a smart move, but your space still requires some extra protection since your condo association’s master policy won’t cover everything. And while condo owners typically face fewer risks than traditional homeowners, they certainly face more than renters. Fortunately, the right condo insurance policy can offer condo owners the protection they need. But where do you find it?
An independent insurance agent is always ready to help. They'll get to know all about you, your condo, and your needs before shopping multiple insurance companies to find the right mix of coverage at a cost that fits your budget perfectly. But before you get the ball rolling, here's a bit of background worth knowing to help you understand just what you're looking for.
What Is Condo Insurance?
No matter where you live, condo insurance is essentially an agreement between the condo owner and an insurance company where the insurer agrees to cover financial losses relating to damages and liabilities. Of course, 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.
The term “condo” is a legal distinction on 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.
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.
What Will My Condo Association’s Master Policy Cover?
One nice thing about condo ownership is that you’re not responsible for covering the entire building with your insurance policy, or even your entire condo. Here’s a breakdown of the kinds of coverage included in the condo association’s master policy:
- Liability coverage: Just like anyone else, your condo association needs a good amount of liability protection. In the event a tenant or guest gets injured in one of the common areas, your condo association’s master policy will cover medical and legal costs relating to the incident. These costs may include attorney and court fees as well as hospital visits.
- Property coverage: The common areas of your condo building are protected by the association’s master policy from things like theft and vandalism, as well as damage due to certain natural disasters and other perils. Structural elements included in this coverage can be things like walkways, roofs, basements, courtyards, and elevators.
- Coverage for part of your unit: Depending on your specific condo association’s master policy, coverage may be provided for certain structural elements of your individual unit. Things like the walls, ceilings, and floors of your condo may be protected against damage due to covered perils. Other policies still may include protection for built-in fixtures that came with the condo, such as lighting. You’ll need to be sure to double-check your lease or contract to be sure on this potential coverage aspect, though.
That’s what the condo association’s master policy covers in a nutshell. Of course, specific coverages will vary by the condo association and their policy, so it’s important to get clear on what all is protected by their insurance before hunting for your own policy.
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. But 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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Does Condo Insurance Cover Me on Vacation or While Renting an Airbnb?
When it comes to renting a room for vacations, whether it’s in a hotel or an Airbnb, condo insurance protects you essentially the same way a homeowners insurance policy would while you’re away. Your condo insurance policy protects you from a liability standpoint in the event you cause property or other damage or upset to the Airbnb or its owners/other inhabitants. This aspect of protection would cover legal expenses and court settlement fees.
Your condo insurance policy also protects your personal property while renting a hotel room or an Airbnb. For example, if there was a fire at the Airbnb and your stuff got damaged or destroyed, you’d be covered under your personal property coverage, the same way as you would under a homeowners insurance policy, even though you’re away from home. However, the extent of your coverage is likely to be less than if the incident occurred within your condo.
Are There Any Aspects of My Airbnb Rental that Condo Insurance Doesn’t Cover?
While condo insurance provides a lot of important and helpful coverage while you’re renting an Airbnb, unfortunately there are a couple of unique scenarios in which your policy won’t protect you. These include:
- If the Airbnb rental includes the use of a car.
- If the Airbnb rental includes the use of an ATV.
- If the Airbnb rental includes the use of a boat.
- If the Airbnb rental includes the use of a jet ski.
Just like with a homeowners insurance policy, unfortunately your condo insurance policy won’t cover the use of any vehicles while renting your Airbnb, including any liability issues that may arise in the event of an accident. It’s important to understand this gap in your coverage, because the option of including car or recreational vehicle use along with room rentals is becoming popular in the Airbnb world.
If your Airbnb deal includes the use of a car or other vehicle in the package, consult with your independent insurance agent first to be sure you leave for your trip prepared with all the necessary coverage. Nothing could kill the relaxation vibe of your vacation faster than an incident, especially if you find out it’s one your condo insurance policy won’t cover.
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What Information Is Needed to Get a Quote or Get a Condo Insurance Policy?
Once you’re serious about shopping around for a condo insurance policy, you’ll need a bit of info in order to get a quote or get your coverage. You might need to have some or all of the following ready to go:
- The zip code of your new condo
- The amount of personal property coverage you want
- The amount of liability coverage you want
- The deductible amount you want
- Identification info such as birth date and Social Security number
Your independent insurance agent can help further assist you with exactly what information is required to get quotes or get coverage, and can even find condo insurance quotes for you and/or hook you up with the right policy for your needs.
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.
Are There Any Condo Insurance Discounts Available?
Quotes are great, but discounts are even better. When it comes to condo insurance rates and potential discounts, it all comes down to how much of a risk factor can be shaved off of your property in order for the insurance company to cut you some slack on your premium.
Here are a few common condo insurance discounts on the market:
- The new construction discount: It may come as a surprise that newer condos are actually cheaper to insure because they come without plumbing or wiring issues found in older buildings. As a result, if you purchase a condo that’s brand new, you’re likely to get a significant discount on your insurance policy.
- The companion policy discount: If you purchase your auto insurance through the same provider as you have your condo insurance coverage, you’re likely to receive another significant discount on both of your premiums.
- The security system discount: Theft is a huge concern for insurance companies. If you purchase a condo in a building with extra security measures like burglar alarms, you may greatly reduce your risk of break-ins and theft. As a result, your insurance company will likely reward you with a discount.
- The gated community discount: This one also relates to the risk of theft. Living in a gated community will obviously reduce that risk, and insurance companies observe that. If you’re fortunate enough to live in a more secure community, you’re more than likely also fortunate enough to receive a break on your condo insurance premium.
- The sprinkler discount: Insurance companies’ main concern when it comes to homes of all kinds is fire damage. If you purchase a condo that’s equipped with a sprinkler system, you’ll probably be rewarded with a sizeable discount on your insurance premium. You may also be able to install one yourself if the building doesn’t already have them equipped.
- The paid-in-full discount: Insurance companies love to reward those who pay their premium in full at the time of purchasing their policy. Not only can you save yourself and them a lot of paperwork, but you’re also likely to earn yourself a nice discount on your total premium if you knock it out in one lump sum, as opposed to opting for monthly payments.
Keep in mind that this is only a list of common condo insurance discounts available on the market and is not extensive. These discounts also may not apply to everyone in each situation, and the availability and amount of the discount offered will vary heavily by the insurance company. Your independent insurance agent can provide you with more information.
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