How to Buy the Best Condo Insurance (2024)
- Expertise: Auto insurance, home insurance and renters insurance
- Education: Sonoma State University (BA in English)
Aaron Besson has worked at LendingTree for more than seven years and has been a staff writer for the last five years. He specializes in producing research-backed content about auto, home and renters insurance. Aaron enjoys the deep dig into insurance data to get the right answers to hard questions. His work has been cited by CBS, iHeart Radio, the Sacramento Bee and Yahoo.
Condo insurance (or an “HO-6 policy”) covers risks to your condominium unit that your association’s master policy does not. To get the best condo insurance for your situation, compare homeowners insurers by their rates and types of coverage.
How do I buy condo insurance?
To buy the best condo insurance, you’ll want to review the homeowner’s insurance companies in your area and compare quotes.
If there’s a specific danger you want covered (see below for options), you should check to make sure they offer it, though standard condo/HO-6 policies usually don’t vary much from insurer to insurer.
Compare quotes from several different insurers. Next, contact a couple that have the cheapest rates and make sure their policy includes any special coverage you need.
The average cost of condo insurance nationwide is $531 per year, although other factors can affect the cost, including:
- Your condo’s ZIP code
- Your claim history
- Coverage limits required
- Coverage under your homeowner’s association master policy
What does condo insurance cover?
A condo insurance or HO-6 policy usually covers your belongings, any liability to others, and other costs that result from damage to your unit.
Some of these coverage types have set limits, while others can be chosen by the policyholder.
Personal property coverage
This portion of your condo insurance policy covers your belongings, such as your clothes, furniture and electronics.
Expensive items such as jewelry and artwork may be covered to a smaller limit than the personal property limit stated in your policy.
Check with your insurer to see if these are covered at their actual cash value or at the (usually higher) cost of replacement. Also ask about paying more to get higher limits for your coverage.
Liability
Liability covers medical and legal expenses for which you are found responsible. One example is if your leaky refrigerator causes water damage affecting another unit.
Medical payments
Similar to liability coverage, but it specifically covers medical payments coverage to others. For instance, if a guest injures themselves in your unit, this might cover their medical expenses and other related costs, such as wage loss.
Additional Living Expenses (ALE)
Also known as “loss assessment,” ALE covers the costs of relocating while damage to your condo unit is being repaired.
ALE coverage can include:
- Restaurant meals
- Living space rental
- Furniture rental
- Laundry
- Extra commute costs
ALE only compensates for expenses above your usual standard of living. So for example, if your regular commute to work costs $100 a month, but, due to relocation, you now spend $130 a month, ALE would cover the extra $30.
Dwelling coverage
Dwelling coverage insures the internal structure, appliances and fixtures of your unit. How much of this coverage you need depends on your condo association’s master policy.
The master policy will fall into one of three types:
- All-inclusive: This covers almost everything and may make dwelling coverage in your condo insurance policy unnecessary.
- Single entity: This is usually similar to an all-inclusive policy, except that any improvements and additions you make to the unit are excluded.
- Bare walls: This covers only the walls, floors and ceiling. Any attachments, appliances or improvements are not included.
Be aware that most condo insurance policies are “named-peril,” meaning only those dangers listed are covered. Here’s what you can typically expect:
| Usually included in dwelling coverage | NOT usually included |
|---|---|
|
|
How much condo insurance do I need?
State law does not require you to carry condo insurance. However, if you are financing your condo, your lender will probably require you to have it to protect their investment.
Personal property coverage is the key part of your HO-6 policy. You may want to make a list of your valuables to get an idea of how much it would cost to replace them.
Most standard condo insurance policies come with a base liability coverage limit of $100,000. While this may seem like a lot, a long court case or hospital stay can use that up quickly. Any liability-related costs over your limit come out of your pocket. Consider raising your liability limit in order to avoid financial catastrophe.
Meanwhile, how much dwelling coverage you need will depend on your condo association’s master policy, as mentioned above.