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Homeowners’ Insurance for Condo Complex – Things to Consider

In general, homeowners’ insurance is meant to cover the damages and losses for the beneficiary. The damages could include personal property damage as well as liability covers.

If you own a property, this general definition should fit into your dictionary. However, when you own a condominium, the regular homeowners’ insurance may not cover all your losses.

image - Homeowners’ Insurance for Condo Complex - Things to Consider
Homeowners’ Insurance for Condo Complex – Things to Consider

Yes, you read that right. A typical homeowners’ insurance covers the constructed property, also known as the super-built area, and the surrounding estate.

But this does not make sense when it comes to condo complexes. There are no surrounding estates in your name, and likewise, you shouldn’t have to pay for any community areas.

So, what do you do?

You get an HO6 insurance cover.

What Is Ho6 Insurance?

When you live in a condo complex, you only possess ownership of the unit in your name. You do not own any of the community areas such as the hallway, or the swimming pool.

For these common areas, your condo association usually has a separate insurance cover. The policy is typically known as condo master insurance.

And it covers the common areas in a condo complex. You also pay a regular premium for the insurance cover, within your HOA’s monthly or annual dues.

Evidently, the condo master insurance does not cover any of the property or possessions inside your unit. It means if there were to be an uncertain event or accident, you would need to pay for the repairs and damages out of your pocket.

This is where HO6 insurance comes into play. With a personalized condo insurance cover, you can expect to be at peace without having to compromise with your personal finances.

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What Does Ho6 Insurance Cover?

As already mentioned, your HOA cover may not include your personal belongings or the interiors of your unit. It means you must get your own insurance for the things that you have inside your unit.

In general, condo insurance is meant to cover:

Structural Damages

Any structural damage to your unit from the inside is usually covered under the HO6 policy. It includes your wooden floorings, cabinets, carpets, light and plumbing fixtures, and inner walls and countertops.

Since all of these structural elements are inside your unit, your condo master insurance would not cover them.

Contents Damages

If someone breaks into your unit, or there happens to be a fire accident, your HOA cover will also not pay for such damages. The damage or loss of your condo contents should, however, be covered under your personal policy.

Some of the commonly included contents in condo insurance are furniture, appliances, electronics, clothing, artwork, and your TV set.

Liability Coverage

Not only does typical condo insurance covers the contents and the structure but also liabilities. In other words, if someone were to get injured inside your condo unit, your insurance should also pay for their medical expenses.

Apart from this, you can also expect your policy to cover additional expenses such as loss of use. Or, the lodging or accommodation costs till your condo unit is being repaired or restored.

With this, the general inclusions for any condo insurance policy are concluded. However, you can add more features or benefits to your policy, depending upon your needs.

Notably, your premium costs would also increase accordingly, though.

How many covers Do You Need?

Now that you understand what a condo insurance policy is and how it is different from regular homeowners’ insurance, you might be considering buying one. But, wait! There’s more to it.

Before your buy any condo insurance in a jiffy, it is better to evaluate certain things. For example, how much you can pay for the premium? Or, how much cover do you need?

Keep reading to find out more.

Consider Your Condo Master Insurance

First things first, you need to learn more about the insurance that your HOA has for society. The condo master insurance covers can vary largely from buyer to buyer.

Depending upon the extent of security that your master cover offers, you can estimate the securities you’d need.

Estimate Your Structural and Content Costs

Once you know what things are covered in the master policy, the next thing is to consider the things that you need insurance for.

You must consider the depreciation in the cost of your contents. And for your structural damages, you must consider the cost of repairs and replacements.

As a rule of thumb, your total coverage cost should not be less than the actual cost of the contents and structural repairs.

Think of Additional Coverage That You May Need

Apart from the contents and the structural cover, there are some other things that you may need insurance for. And generally, these items are not included in the standard plans.

For example, expensive artwork or jewelry is usually not covered under the standard or the basic condo insurance plans.

For such expensive items, you may need to pay an additional premium. The additional premium that you pay would depend upon the security systems in your society and your unit, along with the cost of the possession at the time of insurance.

How to Compare Insurance Rates?

You can easily get your hands on condo insurance since there are many companies; big and small. But, it is only later that you may realize that you have paid more than you should have.

For simplicity, note that your insurance premium should be below 30% of the total cover, especially if you’re getting term insurance.

On the other hand, if you’re thinking of getting life insurance, you must anticipate the rate to be reduced further.

It is only after you compare the rates from different insurers that you may find the best plan for your needs. After all, no one wants to spend more when they can save instead.

On this note, we hope that the information provided in this article has helped you. It is only possible, with the right knowledge and strategy, to conquer the financial hurdles and keep moving ahead.