Condo insurance, also known as HO-6 insurance, is a type of homeowners insurance policy specifically designed for homeowners who live in a condominium. This type of insurance provides coverage for the interior of the condo unit, as well as personal property and liability. The insurance policy covers damages to the interior of the condo unit and personal property caused by events such as fire, theft, and certain natural disasters.
What does condo (HO-6) insurance cover?
Condo insurance typically covers the following types of coverage:
- Dwelling coverage: This coverage provides protection for damages to the physical interior structure of the condo unit. This includes walls, floors, ceilings.
- Personal property coverage: Also known as contents coverage, provides protection for personal property that is owned by the insured and located within the condo unit. This includes furniture, appliances, electronics, clothing, and other items. For example, if a thief broke into the unit and stole a laptop and a camera, personal property coverage would help pay to replace them.
- Liability coverage: This type of coverage provides protection for the insured in case they are held liable for damages caused to others. For example, if someone slips and falls in the unit and sues for damages, liability coverage would help pay for the cost of the legal defense and any damages awarded.
- Loss of use coverage: This coverage provides protection for additional living expenses in case the condo unit becomes temporarily uninhabitable due to a covered peril, including the time spent waiting for the unit to be repaired or rebuilt. For example, if a fire broke out in the unit and rendered it uninhabitable, loss of use coverage would help pay for the cost of temporary housing while the unit is being repaired.
- Loss assessment coverage: This type of coverage provides protection for the insured in case they are assessed a portion of the cost of damages to the common areas of the condominium complex. For example, if a storm damages the roof of the building and the condominium association assesses each unit owner for a portion of the cost of repairs, loss assessment coverage would help pay for the insured’s share of the assessment.
Common Covered Perils:
- Fire and smoke
- Lightning strikes
- Windstorms and hail
- Vandalism and malicious mischief
- Damage from an aircraft, car or vehicle
- Falling objects
- Weight of ice, snow or sleet
- Water damage
What’s not covered under condo (HO-6) insurance?
Condo insurance does not typically cover the following:
- Damages to the exterior of the building or common areas: This includes the roof, siding, foundation, and other exterior elements of the building. These damages are typically the responsibility of the condominium association and covered under their insurance policy.
- Flood or earthquake damages: These types of natural disasters are typically not covered under standard condo insurance policies. To be protected from these risks, it’s recommended to purchase separate flood or earthquake insurance.
- Personal injury or property damages caused by intentional actions: This includes damages caused by the insured or someone living in the unit that are intentional or criminal in nature. For example, if the insured intentionally starts a fire that causes damages to the unit, this would not be covered under the policy.
- Losses from poor maintenance or lack of upkeep: If a loss is caused by the neglect of the condo unit, like a pipe burst due to lack of maintenance, this would not be covered by the policy.
- Certain types of natural wear and tear: certain types of damages caused by natural wear and tear like mold or pests are not covered by the insurance policy.
How much does condo (HO-6) insurance cost?
The cost of condo insurance can vary depending on several factors, such as location, coverage limits, and the value of personal property. According to the National Association of Insurance Commissioners (NAIC), on average countrywide, condo insurance can cost anywhere from $511 per year. However, these averages can change depending on the amount of coverage needed. The following table shows the average annual and monthly premiums for different insurance coverage ranges:
|$13,999 and under
|$14,000 – $19,999
|$20,000 – $25,999
|$26,000 – $31,999
|$32,000 – $37,999
|$38,000 – $43,999
|$44,000 – $49,999
|$50,000 – $74,999
|$75,000 – $99,999
How much condo (HO-6) insurance do I need?
A general rule of thumb is to purchase enough insurance to cover the cost of rebuilding the interior of your condo unit, as well as the replacement value of your personal property. It’s important to regularly review your coverage and update it as necessary to ensure that you have adequate protection.
Is condo (HO-6) insurance required?
Condo insurance is not legally required, but it is highly recommended. Many mortgage lenders require borrowers to have condo insurance as a condition of the loan. Additionally, most condominium associations require unit owners to have insurance as a condition of their membership.
What’s the difference between HO-3 and HO-6?
HO-3 insurance also known as the special form is a type of homeowners insurance that provides coverage for a single-family home. It typically covers damages to the home’s structure, personal property, and liability. On the other hand, HO6 insurance is designed specifically for condominiums and covers damages to the interior of the unit, personal property, and liability.
HOA insurance vs. condo (HO-6) insurance
HOA insurance, also known as master insurance, is a type of insurance that is purchased by the condominium association or homeowners association to cover the common areas and exterior of the building. This includes the roof, siding, foundation, and other exterior elements of the building, as well as common areas such as hallways, elevators, and swimming pools. HOA insurance typically covers damages caused by fire, wind, hail, and other perils.
Condo (HO-6) insurance, on the other hand, is a type of insurance that is purchased by the individual unit owner to cover the interior of their unit and their personal property. This includes walls, floors, ceilings, built-in appliances, and personal property such as furniture, electronics, and clothing. Condo insurance also provides liability coverage and loss of use coverage, which helps with additional living expenses in case the unit becomes uninhabitable due to a covered loss. Condo insurance typically covers damages caused by fire, wind, hail, theft, and other perils.
It’s important to note that HOA insurance and condo (HO-6) insurance are not mutually exclusive and are typically purchased together to provide comprehensive coverage for the condo unit. HOA insurance covers the common areas and the exterior of the building, while condo insurance covers the interior of the unit and personal property. Each unit owner is responsible for purchasing their own condo insurance, but the HOA or the condominium association is responsible for purchasing the HOA insurance.
Adding Additional Coverage with Riders
In addition to the coverage provided by a standard condo insurance policy, policyholders can also add additional coverage with riders or endorsements. These riders provide additional protection for specific types of risks or personal property. Some common types of riders include:
- Personal property riders: This type of rider provides additional coverage for personal property such as jewelry, art, or collectibles that may have a higher value than what is covered under the standard policy.
- Flood or earthquake riders: These types of riders provide additional coverage for damages caused by flooding or earthquakes, which are not typically covered under standard condo insurance policies.
- Loss assessment riders: This type of rider provides additional coverage for the policyholder’s share of the cost of damages to the common areas of the condominium complex.
- Water backup riders: This type of rider provides coverage for damages caused by water backup from sewers or drains.
Choosing an HO-6 insurance policy
When choosing an HO-6 insurance policy, it’s important to consider the following:
- The policy’s coverage limits and deductibles
- Any exclusions or limitations in the policy
- The reputation and financial stability of the insurance company
- The cost of the policy and how it compares to other options
- It’s always a good idea to shop around and compare policies from different insurance companies to find the best coverage at a reasonable price.