If you own a condo or are going to be purchasing one, you will need a condo insurance policy. Condo insurance, also referred to as an HO-6 policy, is different than homeowners insurance in that you as the condo owner are not responsible for the exterior of your unit because you don’t own that part of the property. You only own the interior and all items within the interior of your condo.
The condo association carries a master insurance policy which covers the building and any common areas such as hallways, pools, tennis courts, etc. It is very important to know what exactly is covered by the association’s master policy – it may be an all-in policy which covers anything that is original to the unit like cabinets and plumbing, or it may be a bare-walls policy which only covers the floors, walls, and ceiling. Knowing this information upfront will prevent any surprises in the future and ensure that your policy covers all that is not covered by the master insurance policy.
Condo Insurance covers the following:
- Significant losses and damages to the interior of your condo caused by a fire or some other damaging event. This is very important in the event your condo association only carries a bare-walls master policy.
- Protection against damage or theft of your personal property like clothes, furniture, electronics, etc.
- Personal liability in case someone gets hurt while visiting you in your unit – this will cover any medical or legal expenses you may incur.
- If you find yourself in a situation where you cannot live in your condo for an extensive period of time, your condo insurance policy may help you cover some, or all, of the hotel and living expenses you accumulate over this period of time.
- Loss assessment coverage becomes necessary when your condominium building suffers an extensive loss and the costs to repair or rebuild go above those covered by the master policy. The condo association may ask you and the other condo owners to assist with this overage at which point you would be covered if your condo policy includes loss assessment coverage.
Items typically not covered by condo insurance include wear and tear on the unit, earthquakes, flooding, and sewer backup.
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