Condo Owner Insurance 101
Many young people and retirees choose condo living because of its easiness, inexpensive monthly price tag, and minimal upkeep. Condos are a unique investment and therefore require a unique form of home insurance. While most condos owners have a minimal amount of insurance through their condo association, but additional coverage may be needed to protect your personal belongings.
Condo Insurance vs. Homeowners Insurance
Condo owner insurance is also referred to as "Homeowners Form 6" or "unit-owner" insurance. The major difference between condo owner insurance and homeowners insurance is that most condo policies do not cover the actual structure. It is up to the association to cover the condo units.
Owners are responsible to cover their own individual loss, and not the condo itself. There are several aspects of homeowner’s insurance which are also available in condo owner insurance policies such as:
Water back-up coverage: Insures your property for damage caused by the back-up of sewers or drains. Most coverage policies do not cover water damage if the water came from the ground. If you live in an area prone to sewer backup issues, this may be a worthwhile addition to your policy.
Flood or earthquake insurance coverage: As with homeowner’s insurance, most of the time floods and earthquakes are not included in the policy coverage. If you own a condo in an area prone to flooding or earthquakes, you may want to look into these additional options.
Additional Personal Property: there is generally a $1,000 to $2,000 limit for theft of jewelry on a standard policy. So, if you have jewelry, collectibles, or other expensive items, it might be worth it to get an additional personal property policy sometimes known as a rider.
Condo Owner Insurance vs. Condo Association Insurance
Condo Association Insurance is designed to cover the condo building itself, and the common areas you share with others in your building such as the roof, basement, elevator, boiler or walkways for both liability issues and physical damage.
Most often, this insurance is paid by the association or through monthly dues of association members. However, Condo Association Insurance doesn’t cover much else, and certainly does not cover the individual property lost by condo owners. That is where condo owner insurance steps in.
By insuring an individual condo owner against direct damage to personal property in addition to personal liability and medical payments coverage, it works very similarly to a homeowner’s policy. Depending on the policy, it may also provide additional living expenses if you are the victim of fire, theft or other loss listed in your policy.