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What Is Condo Insurance, and How Much Does It Cost?

If you’re looking into insurance for your condo unit, read on to learn about condo insurance coverage and costs.

A grouping of condos in an Alpharetta neighborhood near a large pine tree and green shrubs surrounding. The nearest condo is white brick with a second-floor porch. Adobe

As a condo owner, you might think that your homeowners association (HOA) insurance safeguards you from expenses incurred from incidents like fire, lightning strikes, theft, or vandalism. Unfortunately, that’s not how it works. Your condo association’s master policy covers damage to common areas and the building’s exterior, but you have to buy a separate condo insurance or HO6 policy.

Condo insurance is similar to home insurance in many ways, but it can differ in terms of coverage and cost. To help you better understand condo insurance, the This Old House Reviews Team rounded up everything you need to know. Read on to learn more about condo insurance rates, coverage, and more.

What is Condo Insurance?

Condo insurance supplements your condo association’s master policy. Master policies typically protect the building’s exterior structure and common areas like hallways and pools. The master policy is funded by HOA or condo association fees.

There are three main types of master policies:

  • Bare walls coverage: This is the most limited condo insurance policy, and it covers the structure, property that is collectively owned by the condo association, and the majority of furnishing and fixtures in common areas.
  • Single entity coverage: This policy combines everything in bare walls coverage with protection for built-in property like fixtures in individual units.
  • All-in coverage: This covers everything in single entity coverage, plus all condo additions and improvements.

It is critical to know what’s covered in your condo association’s master insurance policy because it directly influences the amount of coverage you need.

What Does Condo Insurance Cover?

Your condo insurance policy covers a variety of circumstances like the cost of repairs caused by certain perils, liability costs if you are sued for medical issues or property damage by a guest, replacement for damaged or stolen personal property, and temporarily living costs if your unit is uninhabitable.

You can find a breakdown of the coverage condo insurance typically provides below.

Dwelling/building property coverage

Depending on your condo association’s master policy, you might need insurance for your unit’s interior, known as dwelling coverage. If the master policy provides all-in coverage, you won’t need dwelling coverage.

If the master policy comes with single entity coverage, it will only cover your original appliances and fixtures. If you have made additions or improvements, you might want to purchase dwelling coverage for your policy.

Bare walls coverage from your master policy means that items inside of your unit like fixtures, cabinetry, tiling, appliances, and carpets are not covered, so you’ll need dwelling coverage for them.

Personal property coverage

Your condo insurance will cover the cost of replacing belongings like furniture, electronics, appliances, and clothing if they are stolen or damaged by a covered peril. Valuable items like jewelry, musical instruments, and artwork have limits placed on them, but additional coverage is available.

Personal property coverage comes in two forms:

  • Actual cash value: This is the most affordable option. Your condo insurance provider will pay you the equivalent of the current value of your items, which includes depreciation.
  • Replacement cost coverage: With this comprehensive coverage, your insurer will provide you with a check that covers the original value of the items, not factoring in depreciation.

Not all disasters or perils are covered by condo insurance. Here are the perils you can expect most policies to cover:

  • Lightning
  • Wind
  • Hail
  • Fire
  • Snow
  • Sleet
  • Theft
  • Vandalism
  • Riot
  • Explosion
  • Smoke
  • Aircraft
  • Vehicles
  • Burst pipes

Personal liability and medical payments coverage

This coverage protects you from medical expenses and legal fees if you’re sued after a guest is injured on your property. This coverage also applies to the costs associated with a guest suffering personal property damage.

Additional living expenses/loss of use coverage

This kind of protection covers the costs you incur from living outside of your temporarily unavailable condo unit due to a covered peril. This protection covers things like accommodations, hotels, transportation, and dining.

Loss assessment

This type of coverage is not always included. It’s used when the cost of repairing or rebuilding your building exceeds the limits of your condo association’s master policy. When this happens, individual condo unit owners must contribute. Your loss assessment coverage may partially or completely cover the sum.

Vacant condo insurance

If your condo is vacant for a long period, in general at least 30 consecutive days, your policy might not cover claims for issues that occur during that period because they are considered higher risk. Consider purchasing vacant condo insurance if you plan to leave your condo for more than a month.

How Much Condo Insurance Do You Need?

Condo insurance is not required by the state, but often your mortgage lender or condo association will require it to protect their financial interests. How much you decide to get is a personal choice, but here are some general guidelines.

First, go over your condo association’s master policy to see how much dwelling coverage is included. The more that is covered by the master policy, the less you will need. To determine the amount you want, think about how much it would cost to rebuild your condo if it was damaged. Consider its original layout, and factor in the value of any additions or changes you have made to your condo.

In general, the limit for personal property coverage is 50% of the dwelling coverage. If you have a lot of valuable items like jewelry, consider purchasing additional coverage.

Condo insurance usually provides $100,000 in liability coverage. Typically, you have the option to increase this to up to $500,000. If you are sued, your investments, savings, vehicles, and other assets are at risk. Consider purchasing enough liability protection to cover the cost of all your assets. If this amount exceeds $500,0000, consider purchasing an umbrella policy.

Loss-of-use condo insurance coverage is generally about 20% of dwelling coverage.

How Much Does Condo Insurance Cost?

The amount you pay for condo insurance will depend on a variety of factors, including where you live, the age of your condo, the insurance company you choose, the deductible you select, and more. The average cost of condo insurance is $488 per year, according to 2017 data collected by the National Association of Insurance Commissioners. Here is a breakdown of the yearly cost average by state based on their data.

Cost

State Yearly Cost
State Yearly Cost
Alabama $540
Alaska $374
Arizona $389
Arkansas $518
California $501
Colorado $381
Connecticut $392
Delaware $406
Florida $942
Georgia $473
Hawaii $293
Idaho $405
Illinois $382
Indiana $345
Iowa $279
Kansas $413
Kentucky $381
Louisiana $736
Maine $330
Maryland $308
Massachusetts $441
Michigan $353
Minnesota $299
Mississippi $570
Missouri $377
Montana $373
Nebraska $332
Nevada $409
New Hampshire $316
New Jersey $437
New Mexico $381
New York $540
North Carolina $428
North Dakota $287
Ohio $315
Oklahoma $604
Oregon $345
Pennsylvania $377
Rhode Island $465
South Carolina $483
South Dakota $288
Tennessee $457
Texas $771
Utah $253
Vermont $339
Virginia $338
Washington $360
West Virginia $305
Wisconsin $249
Wyoming $361

For the most accurate pricing, we recommend getting quotes from multiple companies in your area:

The most expensive states for condo insurance

The states where condo insurance is the most expensive are high-risk areas, prone to weather events like hurricanes and tornadoes. The top five most expensive states for condo insurance are:

  • Florida
  • Louisiana
  • Texas
  • Oklahoma
  • Mississippi

The cheapest states for condo insurance

States that have more affordable condo insurance tend to be less densely-populated and have a lower risk for extreme weather. They include:

  • Wisconsin
  • Utah
  • Iowa
  • North Dakota
  • South Dakota

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