If you’re in the process of purchasing a condo, now might be the perfect time to start considering your condo homeowners insurance options. While many condominiums require you to have a specific condominium association insurance policy, it’s in your best interest to purchase an additional condo homeowners insurance policy to ensure that your personal belongings and the physical goods within your home are covered in the event of an emergency.
Here’s what you should know about condo insurance is, what it covers, and how much it costs, as well as how to go about purchasing the right condo insurance policy for your current situation.
What is condo insurance?
Condo insurance, more specifically referred to as HO-6 insurance, is a type of property insurance that covers personal property inside the home as well as its essential structures. Most condo insurance policies will reimburse you for physical damages and charges associated with:
- Electronics (ex. TV, computer)
- Expensive personal items (ex. jewelry, artwork, etc.)
- Additional living expenses or “loss of use”
- Liability costs and/or medical payments
Most condo owners are required to pay monthly installments to a homeowners association (HOA) for exterior property management and upkeep as determined by your lesser. Before selecting an additional insurance plan, be sure to know whether your potential policy offers “bare walls” or “studs in” coverage to determine exactly what your rights are and what is covered.
Bare walls: This insurance policy provides coverage to your specific condo, but the most invasive procedure it will cover is repairing the drywall. Additional physical aspects such as flooring, plumbing, and electrical fixtures are not covered under this policy.
Studs in: Also referred to as “walls in” or single entity coverage, this insurance policy covers everything from the exterior framing of the unit inward, including any fixtures within the apartment (i.e., sinks, built-in cabinets, and other attached appliances).
It’s important to note that condo homeowners insurance typically does not include coverage for natural disasters such as earthquakes and floods, which must be insured under a separate insurance policy or purchased as an add-on to your current insurance plan.
How much does condo homeowners insurance cost?
According to a recent home insurance report conducted by the National Association of Insurance Commissioners, the average condo insurance cost is $471 per year. But like most insurance packages, the cost of HO-6 insurance depends on a variety of factors, including your unit’s location, the numer of previous insurance claims you and your neighbors have made, and the overall value of your newly purchased home.
Purchasing condo insurance
It is very important, particularly for new homeowners, to select an insurance plan that provides comprehensive coverage at an affordable price point. The cost of insurance is typically billed as a monthly fee, though you will have the option to pay it all off in one shot each year, so be sure to consider your payment options before agreeing to a given policy.
Insurance is supposed to protect you in the event of an emergency, not put your current or future financial situation at risk, so take the time to assess your situation, write down any financial goals you have, and determine what you’re able to pay without compromising on other aspects of your life.
Before selecting a condo homeowners insurance plan, you must be sure to conduct extensive research into the most popular insurance firms and policies, while also comparing price points to help you select the best one to meet your specific needs.
Finally, to make the most out of your condo homeowners insurance, you should always keep your current policy as up-to-date as possible, meaning that if you purchase any new expensive appliances or personal property that you want covered, you must amend your insurance policy to protect these new goods in the event of an emergency. A simple way to keep track of this is to write down any relevant new purchases you make each week, month, or on whatever timeline works for you so you don’t miss anything.