Are you a condo owner unsure what your HOA insurance covers? Or whether your property is fully protected? You’re not alone.
It’s a common point of confusion. Many condo owners assume their homeowners association (HOA) insurance covers everything. But in most cases, HOA insurance only protects the building’s exterior and shared areas. This includes places like hallways, stairwells, and the roof. What the HOA often doesn’t cover is inside your unit, which includes personal belongings, interior finishes, and personal liability. This is where condo insurance, also called HO-6 insurance, becomes important.
What Is Condo Insurance?
Condo insurance helps protect the inside of your home. While coverage can vary by policy and provider, most plans include:
- Coverage for personal belongings like furniture, electronics, and clothing
- Protection for damage to interior items such as cabinets, floors, and fixtures
- Liability coverage if someone is injured in your condo and you are responsible
- Coverage for temporary housing if your home becomes unlivable due to a covered event
This coverage can vary based on your specific policy, so always review the details with your insurance agent and consult your HOA’s terms for clarification.
How Condo Insurance Is Different from Homeowners Insurance and HOA Policies
Homeowners insurance is for people who own the entire structure of a home. That includes the inside, the outside, and the land it sits on. It typically covers the roof, walls, garage, and even fences or sheds.
Condo owners are different. When you buy a condo, you usually only own the inside of your unit. The building exterior and common spaces are handled by your HOA’s master policy.
Because of this, a standard homeowners policy is not needed in these cases and instead a HO-6 is likely the better option. The right condo insurance will help fill the gap between what your HOA covers and what you are responsible for.
What HOA Policies Usually Cover
Every HOA policy is different, but most fall into one of three categories:
- Bare Walls or Walls-Out: Covers only the building’s exterior and shared areas
- Original Specifications: Covers the unit’s interior, but only as it was originally built
- All-In or Walls-In: Includes original interior finishes and some upgrades, but still excludes your personal belongings and liability
No matter which type your HOA provides, it usually does not protect what is inside your unit. Always check your HOA documents or speak with an insurance expert to understand exactly what is covered.
Do You Still Need Condo Insurance If You Have a Mortgage?
Long story short, yes. Most mortgage lenders require condo insurance before approving your loan. Even if you’ve already paid off your home, condo insurance is still a wise choice. Without it, replacing your belongings or repairing damage could cost you.
Costs of Condo Insurance
Condo insurance is usually much more affordable than standard homeowners insurance. That is because your HOA fees typically cover the building’s exterior and shared areas.
Buying homeowners insurance when you only need condo insurance can lead to paying for coverage you do not actually use. This mistake is common, but with the right guidance, it is easy to avoid.
Looking at the Numbers:
- Condo insurance, as reported by Business Insider, averages about $531 per year
- Homeowners insurance averages more than $2,100 per year (NerdWallet)
- HOA fees usually range between $100 and $1,000 per month, depending on location, property type, and included amenities. The national average is about $250 per month, or $3,000 per year (Axios).
Based on these numbers, here is an example scenario to help put costs into perspective*:
- If you accidentally purchase a homeowners policy, your total annual cost could exceed $5,000 when combined with HOA fees
- With the correct condo insurance, you are more likely to pay around $3,500 per year
- That is a savings of at least $1,500 each year, and possibly thousands over time
Protect What’s Yours
Not sure what your current coverage includes? Contact us today to chat with an agent about your options or for a custom condo insurance quote.
*These numbers are general estimates for example purposes only. Actual costs will vary based on your location, property, coverage needs, and HOA structure.
