If you own a condo, you might assume the condo association's insurance has you covered. Here's the surprise: it doesn't. The association's master policy typically covers the building's exterior and common areas, but your unit's interior, your belongings, and your liability? That's on you. That's where condo insurance—officially called an HO-6 policy—comes in.
Most people don't realize how affordable condo insurance is—averaging just $40 to $55 per month in 2024—or how much financial protection it provides. Let's break down exactly what your condo insurance covers and why it's essential, even if your mortgage lender doesn't require it.
Your Personal Belongings Are Protected
Personal property coverage is the foundation of your condo insurance. This covers everything you own inside your unit—furniture, electronics, clothing, kitchen appliances, and even items stored on your patio or deck. Standard policies typically provide $60,000 in personal property coverage, though you can adjust this based on what you actually own.
Here's what makes this coverage valuable: it doesn't just protect your stuff at home. If someone steals your laptop from a coffee shop or your luggage gets stolen while traveling, your condo insurance can reimburse you. The coverage follows you and your belongings wherever they go.
To figure out how much coverage you need, take an honest inventory of what you own. Walk through your condo and estimate the replacement cost of your furniture, electronics, clothes, and other possessions. Experts recommend rounding up to the nearest $10,000 to ensure you're adequately covered. If you have expensive jewelry, art, or collectibles, you may need additional coverage through scheduled personal property endorsements, as standard policies have limits on high-value items.
Interior Fixtures and Improvements Get Coverage Too
Your condo insurance also covers the interior structure of your unit—the parts that aren't covered by the association's master policy. This includes walls, ceilings, floors, built-in appliances, cabinets, countertops, plumbing fixtures, and electrical systems within your unit. If you've upgraded your kitchen with granite countertops or installed hardwood floors, those improvements are protected under your HO-6 policy.
The coverage kicks in when something goes wrong. If a pipe bursts and damages your flooring, or if a fire starts in your unit and damages your cabinets and walls, your condo insurance covers the repairs. This is crucial because the association's master policy typically stops at the drywall—anything inside your unit is your responsibility.
One important note: review your condo association's master policy to understand exactly where their coverage ends and yours begins. Some associations have "bare walls" coverage that only covers structural elements, while others have "all-in" coverage that includes some fixtures. Knowing this helps you avoid coverage gaps or paying for duplicate protection.
Liability Protection Is Your Financial Safety Net
Here's what most condo owners overlook: liability coverage might be the most valuable part of your policy. If someone gets injured in your unit—say a guest slips on your wet bathroom floor and breaks their wrist—you could be personally liable for their medical bills, lost wages, pain and suffering, and legal fees if they sue. Without insurance, that could easily cost you $50,000 or more out of pocket.
Your condo insurance includes personal liability coverage that protects you in these situations. Standard policies typically start at $100,000 in coverage, but insurance experts recommend carrying at least $300,000. Why? Because if you have savings, investments, or other assets, a lawsuit could target everything you own. Higher liability limits cost surprisingly little—often just $10-20 more per year—but provide significantly more protection.
Liability coverage also protects you if you accidentally damage someone else's property. If your dishwasher leaks and causes water damage to the unit below yours, your liability coverage can pay for the repairs and any damaged belongings. Most policies also include medical payments coverage (typically $5,000) that pays for minor injuries to guests regardless of fault, which can prevent small incidents from turning into lawsuits.
Additional Living Expenses When You Can't Stay Home
If your condo becomes uninhabitable due to a covered event—like a fire, severe water damage, or smoke damage—your insurance provides additional living expenses coverage (also called loss of use coverage). This pays for the extra costs you incur while living somewhere else during repairs, including hotel bills, restaurant meals, and even laundry expenses.
This coverage is typically a percentage of your personal property coverage—usually 20% to 30%. So if you have $60,000 in personal property coverage, you'd have $12,000 to $18,000 available for living expenses. That might sound like a lot, but if repairs take several months and you're paying for a hotel or temporary apartment, costs add up quickly. The good news is this coverage ensures you can maintain your normal standard of living while your home is being restored.
Loss Assessment Coverage for Shared Expenses
This is a unique feature of condo insurance that many owners don't understand until they need it. Loss assessment coverage helps pay your share of expenses when the condo association needs to make major repairs after a covered loss, and the master policy's deductible or coverage limit doesn't cover everything. For example, if a hurricane damages the building's roof and the association assesses each unit owner $5,000 to cover repairs, your loss assessment coverage kicks in.
Most condo policies include around $1,000 in loss assessment coverage automatically, but you can usually increase this to $50,000 or more for a small additional premium. Given that special assessments can sometimes reach tens of thousands of dollars per unit, this optional coverage is worth considering, especially if you live in an area prone to hurricanes, earthquakes, or other major disasters.
What Condo Insurance Doesn't Cover
Understanding what's not covered is just as important as knowing what is. Standard condo insurance policies exclude several types of damage. Flood damage from heavy rain, storm surge, or overflowing bodies of water isn't covered—you need a separate flood insurance policy from the National Flood Insurance Program or a private insurer. Similarly, earthquake damage requires separate earthquake insurance.
Other common exclusions include damage from pests (termites, rodents, birds), normal wear and tear, and maintenance issues like mold from long-term leaks or sewer backups (though you can often add sewer backup coverage as an endorsement). Your policy also won't cover damage you cause intentionally or business property if you run a business from your condo.
How Much Does Condo Insurance Cost?
The average condo insurance policy costs between $490 and $656 per year—that's roughly $40 to $55 per month. This makes condo insurance significantly more affordable than traditional homeowners insurance, which averages over $1,500 annually. The lower cost reflects that condo insurance only covers your unit and belongings, not the entire building structure.
Several factors affect your premium. Location matters significantly—condo insurance in Florida averages $1,130 per year due to hurricane risk, while states like North Dakota average just $325 annually. Your coverage limits, deductible choice, claims history, and credit score also impact your rate. Installing security systems, smoke detectors, or water leak detection devices can often qualify you for discounts.
Getting the Right Coverage for Your Situation
Choosing the right condo insurance starts with understanding your condo association's master policy. Request a copy from your HOA and review what it covers, then fill in the gaps with your HO-6 policy. Don't assume you need minimal coverage just because the association has insurance—their policy protects the building, not your financial interests.
When shopping for coverage, compare quotes from multiple insurers and ask about available discounts. Bundle your condo insurance with auto insurance for savings, maintain good credit, and consider a higher deductible if you have emergency savings to cover it. Most importantly, review your coverage annually—as you acquire more belongings or make improvements to your unit, you may need to adjust your coverage limits.
Ready to protect your condo and your financial future? Get a quote today to see how affordable comprehensive condo insurance can be. With the right coverage in place, you can enjoy condo ownership with confidence, knowing you're protected against life's unexpected events.
