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So you’re getting ready to buy a condo as your first home, or maybe you’re downsizing your square footage after the kids have left the nest. Either way, you’ll need to make sure you have adequate condo insurance coverage. Here’s a breakdown of condo insurance, what it covers, and how to choose a policy that aligns with your needs.
What Is Condo Insurance (HO-6)?
Condo insurance is designed specifically for condominium owners. Unlike standard homeowners insurance, which covers an entire standalone structure, condo insurance, also known as HO-6, focuses on your individual unit, personal belongings, and liability risks.
“Condo insurance is generally designed to cover what the association policy doesn’t, including your personal belongings, interior finishes, and personal liability. Understanding where the HOA’s responsibility ends and yours begins is key to avoiding costly coverage gaps,” says Adam Bakonis, Sr. Manager, Product Management.
How condo insurance differs from homeowners insurance
Homeowners insurance, or HO-3, covers the home’s structure, roof, and exterior, while your condo insurance policy usually covers what’s inside your unit. As a member of the condo’s homeowners association, you likely also pay HOA fees, a portion of which goes toward a master policy covering the condo building’s exterior, and common spaces.
What Does Condo Insurance Cover?
While coverage can vary by policy, most HO-6 condo insurance policies include several core protections.
Personal property coverage
This covers your belongings, such as furniture, clothing, electronics, and appliances, if they’re damaged or stolen due to an event like fire, theft, or certain types of water damage.
Interior structure and improvements
Condo insurance typically covers the interior of your unit, including walls, flooring, cabinetry, and built-in fixtures, especially if you’ve made upgrades or renovations that aren’t covered by your HOA’s policy.
Personal liability and guest medical payments
If someone incurs an injury inside your condo or you accidentally cause damage to another unit, liability coverage can help pay for legal expenses, medical bills, and settlements. Guest medical payments offer limited coverage for minor injuries, regardless of fault.
Loss of use coverage
If your condo becomes uninhabitable due to a covered loss, loss of use coverage can help pay for temporary housing, meals, and other additional living expenses.
What Condo Insurance Typically Does Not Cover
Before you take out a condo insurance policy, be sure you understand the limits, exclusions, and gaps in your policy.
HOA master policy gaps
Don’t assume your HOA master policy will cover every aspect of your condo. For instance, some cover only common areas of the condo community, while others cover portions of individual units. Get a clear breakdown from your HOA of what they cover and what you need covered with your condo insurance policy.
High-value items and coverage limits
Standard condo policies often have limits on valuables like jewelry, art, collectibles, or high-end electronics. Check with your insurance agent and purchase more coverage, or a rider policy, as needed.
Earthquake and flood coverage
Standard HO-6 policies typically do not cover perils like earthquake or flood. In many cases, HOA master policies also exclude these risks. If you live in an area prone to earthquakes or flooding, you may need to purchase a separate policy or add an endorsement to help protect your unit and belongings from these events.
Factors That Affect HO-6 Pricing
Premiums depend on things like your unit’s location, building age, coverage limits, deductible, claims history, and whether you live in a high-risk area for weather or natural disasters.
How to lower your condo insurance premium
You may be able to reduce costs by bundling policies, choosing a higher deductible, installing safety features, or reviewing and adjusting coverage limits.
Do You Need Condo Insurance If You Have an HOA?
In most cases, yes, you still need condo insurance, even if your HOA has a comprehensive master policy.
Understanding “walls-in” vs “all-in” HOA policies
A “walls-in” policy typically covers only the building structure and common areas, leaving interiors to the condo owner. An “all-in” policy may cover some interior elements, but often excludes personal property and liability.
How to Choose the Right Condo Insurance Policy
Not all HO-6 policies are created equal, so review details carefully and discuss your needs with your insurance agent.
Coverage limits to review
Pay close attention to personal property limits, interior structure coverage, liability amounts, and loss of use limits. If you’re storing pricey jewelry or musical instruments, for instance, you’ll likely need more personal property coverage, or a rider (which is an optional add-on).
Optional endorsements worth considering
Endorsements like scheduled personal property for high-value jewelry, water backup coverage, or loss assessment coverage can provide extra protection where standard condo insurance policies fall short.
Loss assessment coverage, for example, may help protect you financially if your HOA charges unit owners for a portion of a covered loss to shared areas such as damage to a roof, lobby, or other common space that exceeds the association’s master policy limits. Without this coverage, you could be responsible for paying that cost out of pocket.
You may also want to ask your insurance provider about optional protections like Home Systems Protection, which can help cover mechanical or electrical breakdowns of major home systems and appliances, and Home Cyber Protection, which may offer support for certain cyber-related risks such as online fraud or cyber extortion.
Why Work With a Mercury Insurance Agent?
Since condo coverage varies widely, it’s crucial to have a knowledgeable agent who can navigate the complexities of HOA and condo policies.
Personalized coverage for your condo and budget
A Mercury Insurance agent can help you understand your HOA’s master policy, identify coverage gaps, and tailor a condo insurance policy that fits your unit, risk profile, and budget.
Get a Condo Insurance Quote Today
Contact Mercury for a fast, free condo insurance quote, whether you’re buying a unit, reviewing your current coverage, or need help understanding the gaps in your HOA policy.
Adam Bakonis is a Senior Product Manager for Mercury Insurance, overseeing homeowners and landlord products for California. Bakonis originally joined Mercury as a casualty adjuster and has worked in multiple roles, including claims examiner, property field adjuster, claims project and analytics manager.
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