NYC Insurance Blog

What Does Condo Insurance Cover? Everything You Need to Know

Condo owners are required to buy a condo insurance policy. Also known as an HO-6 insurance policy, condo insurance is like homeowners’ insurance because it protects the interior of your condo unit and personal items. Also, condo insurance includes personal liability coverage. This type of coverage pays for damages if you are liable for property damage or personal injury. As a condo owner, it is important to check what is covered by your HOA policy because HOA and condo insurance should complement each other. Condo association master policy, or HOA policy, typically covers the exterior of a condo building, including the hallways, elevators, recreational areas, and lobby.

What Does Condo Insurance Cover?

Personal Property Coverage 

This type of coverage covers your personal items, for example, appliances, clothing, electronics, or furniture, if they are stolen, damaged, or destroyed by covered risks like vandalism, fire, or windstorm. Constantly update your inventory to ensure you are purchasing enough personal property coverage.

Loss of Use Coverage

Loss of use coverage pays for additional living expenses if your condo becomes unsafe or unfit to live in after a covered loss. For example, if you are forced to relocate temporarily after a fire outbreak, the loss of use coverage caters to any incurred costs of gas, laundry, meals, pet boarding, and hotel stays. Suppose you spend $2,000 per month on housing and food, and you end up paying $4,000 that month. The loss of use coverage will cover the extra $2,000. Make sure you have the right amount of coverage for your condo or Home, give us a call!

Loss Assessment Coverage

If the condo's building exterior or shared areas is damaged and there are some remaining costs after the HOA is paid out, this coverage can help pay the remaining costs. Therefore, the loss assessment coverage enables you to avoid incurring out-of-pocket expenses. Suppose your HOA contains $600,000 in coverage for the condo building, and it is damaged in a fire that amounts to a loss of $650,000. The remaining $150,000 is charged to all the condo owners in the building. Without the loss of assessment coverage, you will have to pay the shared cost out of your pocket.

Dwelling Coverage

Dwelling coverage protects the upgrades you make and the condo's structure. For example, if a water pipe burst damaging the cabinets, your condo insurance will cover the cost of repairing or replacing damaged cabinets after you've paid the deductible.

Personal Liability Coverage

Personal liability coverage protects from legal fees or medical expenses if you are responsible for someone else's property damage or injury. For example, if a friend slips and falls in your unit and sues you, personal liability coverage covers all the legal fees and related costs. 

Medical Payments Coverage

This coverage covers all medical expenses if someone is injured in your unit, regardless of who is at fault. Some of the expenses covered include surgery, X-ray, and ambulance rides. Remember, medical payment coverage does not cover your medical bills! Getting the right guidance for your Condo coverage is important, speak with a Broker today!

What Does HOA Master Policy Cover?

Condo owners belong to a homeowner’s association (HOA). Therefore, each condo owner must pay HOA membership fees to help protect the building and shared areas. Therefore, HOA covers the building's exterior and shared spaces like lobbies, swimming pools, exercise rooms, and hallways. HOA master policy varieties:

Bare wall coverage

As the least comprehensive type of HOA policy, bare wall coverage covers the condo building and damage to shared areas and property that belongs to HOA. This means that are wall coverage does not cover your personal belongings. With limited coverage, typical coverage includes plumbing, drywall, wiring, and insulation. Remember, bare wall coverage offers minimal dwelling coverage. Therefore, with this policy, you will buy more dwelling coverage in the long run.

Single entity coverage

It is the most common type of HOA policy because it provides average coverage. With single entity coverage, you can have peace of mind because coverage is extensive, i.e., the policy covers bathroom fixtures, floors, walls, and any other unaltered part of the unit. 

All in coverage

Since it is the most comprehensive coverage, it covers the entire condo, including the improvements and appliances. If the condo building has all-in coverage, you don't need to purchase dwelling coverage. As a result, you will incur cheaper premiums in the long run. However, it is crucial to understand that this policy does not cover personal items like clothes and furniture.

If the condo building has master policy insurance, condo owners only need to cover items and changes that aren't covered by the HOA, like personal liability and personal property. Condo owners should remember that insurance responsibilities vary. For example, some condo associations do not have a master policy. Therefore, unit owners are responsible for providing all the required coverage. 

How Much Condo Insurance Do You Need?

Condo insurance can save you a lot of money in the worst-case scenario, for example, fire. To determine how much condo insurance you should purchase, consider the following:

• Cost of repairing or rebuilding your unit – if your HOA has bare wall coverage, you are responsible for repairing or replacing items like flooring, light fixtures, toilets, and cabinets. Therefore, you can incur hefty out-of-pocket costs if you don't have sufficient coverage. 
• Your personal belongings value – the value of replacing or repairing your personal belongings can help you determine how much condo insurance you should purchase. Carefully calculate the value of your personal belongings, keep an inventory and seek help from an insurance agent regularly. Your insurance policy's price or premiums primarily depends on the deductible, amount of coverage, and associated discounts or offers. Deductible refers to the amount of money a policyholder must pay before the insurance kicks in. Low insurance coverage and high deductible translate to lower premiums. In comparison, more coverage and low deductibles result in higher premiums. 

Most condo insurance policies will cover losses arising from smoke, windstorm, fire, theft, and vandalism. Condo insurance is crucial even if the condo association has its own coverage. Condo insurance helps protect the interior of your unit and personal property. You will also get liability protection if you are held responsible for bodily injury or property damage to others. A knowledgeable insurance agent can help you purchase the right condo insurance. Call us Today for a Free Quote.

---