Why You Need Condo Insurance Even with a Condominium Association Policy

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Lovely condo (Photo: @hellomikee via Twenty20)
One alternative to buying a traditional family home is to purchase a condominium instead. Condos are prized for the freedom they give owners, as all of the maintenance, including mowing the grass, is handled by the condominium association.
However, a drawback to living in a condo is that a standard homeowner’s insurance policy won’t cover a condo. If you live in a condo, you need an HO-6 policy. If you own a condo, or are thinking of buying one, here’s what you need to know to make sure that your condo is properly covered.

What Is HO-6 Insurance?

In simple terms, HO-6 coverage is insurance for a condominium. Anyone who owns a condominium, townhouse, or co-op will need an HO-6 insurance policy to protect their home. In fact, the lender that you borrow the money from to buy your condo will require you purchase an HO-6 policy to protect their investment.
One of the best things about HO-6 insurance is its flexibility. This flexibility is important, as it takes into account the interconnected nature of some condominiums and only provides coverage for the specific condominium in question. This is also the case with detached condos that sit on their own parcel of land within the community.
When providing insurance for a condominium, certain elements of a specific unit are covered by a policy purchased by the condominium association itself, and other elements are covered by the HO-6 policy of the condominium owner.
This is why HO-6 insurance is so versatile: It takes into account what exactly is covered by the owner and the association and prevents overlapping coverage.

What Does HO-6 Insurance cover?

An HO-6 policy is similar to the homeowners insurance policy on a standard home and provides similar coverage. You can find what an HO-6 covers below.
Dwelling: Dwelling coverage applies to the main building and pays to rebuild the interior of the condo if it is damaged by one of the covered perils. If you add any additions to your condo, dwelling coverage should pay for damage to those as well.
Loss of Use: If you have to move out of your condo while it gets repaired, loss of use coverage will pay for your hotel rooms and meals. The coverage amount depends on how much you normally spend while living in the condo and only pays the difference between your normal expenses and your temporary expenses.
Medical Payments: Medical payments coverage pays out if someone, who is not a member of your household, is injured while in your condo. If you or one of the members of your household are injured while in your home, you will have to rely on your health insurance instead.
Personal Liability: Personal liability coverage protects you if a guest is hurt while in your home and takes you to court to sue you for damages. Your personal liability insurance will pay for your legal expenses, including attorney’s fees, court costs, and any settlement reached.
Personal Property: Personal property coverage will pay to replace any personal items damaged or lost in a disaster that damages your condo. Some of the items covered by personal property coverage includes clothing, computers, and furniture, among other items.

What Does Your Condominium Association’s Policy Cover?

Your condominium association will also take out an insurance policy to cover the homes within the community. This coverage is in addition to the HO-6 policy you have on your individual condo and includes the following coverage types.
Liability: The condominium associations’ policy provides liability coverage that pays the medical expenses of any non-residents who are hurt in the community’s common areas, such as a pool, tennis court, or other area generally available to all residents and their guests This coverage will also pay the condo association’s legal costs if the individual sues for damages as a result of their injury.
Property: A condo association’s property coverage pays for damage to any common elements within the community, including exterior walls, fences and gates, and variety of other structures and features, such as a pool, clubhouse, or tennis court.