A Guide to Condo Association Insurance Policies


Did you know that over five million people in the United States live in condos? If you fall in this category, then you must understand the insurance policies that come with your new residence.

Unfortunately, condo association insurance policies can be a bit different from standard homeowner’s policies. If you want to learn how these two areas differ in terms of damage control, then you’re in the right place.

In this guide, we’ll break down everything you need to know about what’s included in a condo association insurance policy.

What Are Condo Association Insurance Policies?

A condo association insurance policy is also known as an HO-6 insurance policy. An HO-6 policy covers your unit.

That includes damage that might incur within it, as well as personal liability coverage and living expenses if you can no longer use your condo. But what about the areas outside your coverage policy?

Who covers these expenses? These repairs will be covered by whatever master policy your condo association has.

However, it’s important to note that there are some gaps in an HO-6 insurance policy. So, let’s go over what’s included in your policy and what you should consider adding on.

What’s the Difference Between Condo and Homeowner’s Insurance?

There are a lot of similarities between an HO-6 insurance policy and HO-3 insurance (also known as homeowner’s insurance). So, why are they two separate policies? Because of one important distinction.

Condo insurance only covers the interior of your specific unit. This is also known as “walls in” coverage.

Homeowner’s insurance, on the other hand, covers both the interior and the exterior parts of the property. Besides that, they’re identical in terms of what they cover.

What Does a Condo Association Insurance Policy Cover?

The average condo insurance policy can be broken down into four categories of coverage. These categories include building property, personal property, personal liability, and loss of use.

In this section, we’ll be taking a closer look at the specific areas that these categories cover.

Building Property

Property damage is the most complicated aspect of an HO-6 insurance policy. Why? Because there are a lot of grey areas between what’s covered by your condo insurance and the condo association’s master policy.

As we mentioned before, Your specific policy will the entire interior of your condo. This includes things like:

  • Interior walls
  • Floors
  • Cabinets
  • Tiling
  • Sinks
  • Any other permanent structures

If your condo is destroyed or damaged by one of the perils covered in your policy, the insurance provider will pay up to the coverage limit on your specific policy.

However, things get more complicated when multiple insurance policies overlap. For example, let’s say the roof of the building is leaking, and water gets into your condo.

The initial leak would be covered by the master policy, while the damage to your apartment would fall under your HO-6 policy.

Similarly, let’s say your neighbor left their water on, and both condo units are damaged. In that scenario, two different HO-6 policies would go into effect.

Personal Property

As a condominium owner, your policy will also cover the things found inside your condo. If they’re damaged or destroyed by a covered peril, then the provider will cover up to your policy limit.

Typically, this includes things like electronics, clothing, and furniture. However, typically the coverage for personal property is around 50% of the dwelling coverage.

In some cases, condo insurance can also cover things outside of your condo. For example, if your car is broken into, then your HO-6 policy will likely cover this as well.

Personal Liability

If someone is hurt in your condo, they could potentially sue you for bodily injury. Similarly, if someone’s personal property is destroyed on your property, then you can be held accountable.

That’s where personal liability coverage comes into play. This coverage will typically cover up to $100,000 for any lawsuits filed against you. Without it, you could be held responsible for some serious legal expenses.

If you’re worried that it’s not enough, then you can purchase more coverage for up to $500,000 towards personal liability.

Loss of Use

Loss of use is one of the lesser-known coverage areas. Let’s say your condo is destroyed by a fire. Or, it’s been evacuated because of a pest problem.

Loss of use will cover any expenses you need to maintain your standard of living.

For many people, this means accommodations like hotels will be covered. It can also include things like your gas if you require a longer commute to work.

What Damage Control Isn’t Covered By Condo Association Insurance?

There are three main areas that the average condo insurance won’t cover. These areas include flooding, earthquakes, and sinkholes.

Even if you don’t live in areas that are prone to these hazards, it’s still a good idea to purchase a separate policy that covers these areas. However, if you live in an at-risk area, then this is essential.

For example, if you live in California, then earthquake coverage is a must.

Similarly, most areas on the east coast are prone to flooding, especially if you live near water. If you need a recommendation for a good supplier, then check out this condo flood insurance provider.

Appreciate Learning About Condo Insurance? Keep Reading

We hope this guide helped you learn how condo association insurance policies help with damage control. You pay a lot for insurance.

So, it’s important to know exactly what your money is going to do in the event of an emergency. That way, you aren’t caught blindsided by some coverage gaps.

Did you learn something from this guide? If the answer is yes, then keep exploring our website to find tons of more informative content.