Also known as a ho-6 insurance policy, condominium insurance protects condominium or cooperative units while providing personal liability coverage and living expense coverage if a condominium it becomes uninhabitable. ho-6 policies are also called interior wall coverage because they protect your individual unit, while the main policy from your condominium or cooperative association covers the common areas of the building.
However, standard condo insurance does not apply in certain situations, such as flooding. you may want to consider additional policies depending on where your condo is located and how long you spend there.
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what does the main insurance policy of the condominium association or hoa cover?
Generally, all common areas in a condominium building are covered by a “master insurance policy” purchased by the condominium association or homeowners association (HOA), unless the statutes provide otherwise. this includes not only the roof and exterior of the building, but also internal areas such as elevators and hallways.
The cost of the primary policy is shared by all owners of the unit, usually in the form of recurring condo or hoa fees. There are three main types of master condo insurance policies:
The type of master insurance policy your HOA or condo association has will directly affect the amount of condo insurance you need to purchase. You should ask the association for a copy of their declaration page, which details the policy and what it covers.
Condominium associations may also have other forms of business insurance, such as a fidelity insurance policy to cover issues with employee dishonesty, but these generally do not relate to your own insurance needs as a condominium unit owner. condo.
what does condo insurance cover?
A typical condo insurance policy provides coverage for the following categories:
the main difference between a ho-6 condo owners policy and a regular ho-3 homeowners insurance policy is that a ho-6 policy only covers the interior structure of a unit from the “walls in”. “. Otherwise, ho-3 and ho-6 policies are quite similar in the way they cover personal property, liability, and additional living expenses.
Generally, homeowners and condominium property coverage will cover a defined list of “named perils,” such as fire, hail, theft, and vandalism. Perils not listed are not covered, which means you are financially responsible for those types of damage.
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However, it is possible to convert your condo insurance to an “open risk” policy by adding special unit owners coverage and an endorsement. An open risk policy covers damage from any cause, except for those mentioned in the policy. Frequently mentioned perils for exclusion of coverage include floods, earthquakes, and sinkholes.
condominium building property coverage
The division of property and insurance coverage between condo owners and condo associations can present difficult questions when damage affects more than one area of a condo building.
Condo insurance building property coverage protects the interior of your unit, including the floor, interior walls, cabinets, sinks, tile, and any other permanent fixtures. If a condo is damaged or completely destroyed by a covered peril, your condo insurance policy will pay up to the coverage limit of the purchased policy. this is typically equal to the full cost of replacing the unit.
Depending on the affected areas, an incident may be covered by several policies at the same time. A leaky roof, covered by the master policy, could also cause water damage to your unit below, which would then bring your HO-6 policy into play. Similarly, water damage in a neighbor’s unit spilling over to you would involve two ho-6 policies.
When choosing your home’s coverage limit, consider the added value of any new fixtures or construction.
condo contents and personal property insurance
A condominium owner’s belongings are protected by personal property (or contents) coverage in a ho-6 insurance policy. Like homeowners insurance, condo insurance will help replace any property owned by the condo owner or family members in the event of a covered loss, up to the policy limit. Covered property may include furniture, clothing, electronics and any other items not permanently attached to the unit.
Like the structure itself, a condo owner’s belongings are covered by a long list of hazards. the most important of these named events are fire, lightning, and theft.
Personal property coverage is not limited to things within the condominium unit. You can file a condo insurance claim for belongings lost, damaged, or stolen outside or while traveling. For example, if something is stolen from your car, you can file a condo insurance claim for it.
condominium liability insurance
Condominium liability insurance protects you and your family members from claims for bodily injury or property damage. Liability coverage is a critical part of every condo insurance policy, as well as every homeowner’s or renter’s insurance policy. Without liability coverage, a condo owner could be forced to pay out of pocket for legal fees that could be financially devastating.
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Most condo insurance policies include at least $100,000 in liability coverage. policyholders can always buy more, usually up to $500,000. If you need even more liability coverage, you can also purchase an umbrella policy to supplement your condo insurance liability limit.
loss of use coverage
Loss of use coverage (sometimes called additional living expenses coverage) isn’t as well known as property or structural coverage, but it can be extremely valuable. If your condo becomes uninhabitable due to damage or an evacuation order, Loss of Use coverage reimburses you for additional expenses you incur to maintain your normal standard of living.
Terms for loss of use can vary: some policies reimburse you up to a certain amount each day or for a certain number of days, while others assign a maximum amount per claim.
loss assessment coverage
Loss assessment insurance, also called special assessment coverage, is an optional coverage you can add to a condo insurance policy. covers situations where unit owners in a condominium are financially responsible for a shared loss, as long as the problem was a covered risk.
cooperative insurance
If you live in a cooperative instead of a condo, you still need to purchase a condo insurance policy (ho-6). coverage needs are often the same, but you should still check your building’s master policy to see exactly what is covered.
If your building only has bare wall coverage, the improvements you make will likely not be covered by the master policy. Examples of this might include new kitchen appliances or new countertops. therefore, your condo/coop policy will have to cover the entire interior of the unit’s walls.
The main difference between a condo and a cooperative is that if you own a condo, you own a unit within a larger building, while if you own a cooperative, you own a portion of the building and rent your unit of it. There is no categorical difference between what a condominium and cooperative master policy will cover, but what those policies cover may differ depending on the building you live in.
flood and earthquake insurance for condominiums
Condominium insurance does not cover damage related to earthquakes, floods, or subsidence. These perils are regularly excluded in condo policies, and you’ll usually need to purchase separate coverage if you live in a region at risk. You may also need to purchase certain additional coverages, such as flood insurance, as a mortgage loan requirement.
vacant condo insurance
If your condo is unoccupied for an extended period of time, usually at least 30 consecutive days, your condo insurance policy may not cover claims for damages that occur during vacancy. Unoccupied and unoccupied properties are considered by insurers to be higher risk as problems may not be resolved quickly and break-ins are more likely.
To make sure your property remains covered, you can purchase vacant condo insurance from your insurer when you intend to be gone for more than a month. this often comes at an additional cost, but the alternative is to take the full risk of theft or a hazard destroying your property.
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