Condo (HO6) insurance, or condominium coverage, is a type of insurance policy that protects you, your stuff, and your unit.
What is condo (HO6) insurance?
If you’re asking, ‘Why do I need condo insurance in the first place?’, read on.
What does condo insurance cover?
Your standard condo insurance policy (called an HO6 policy) provides the following 5 areas of insurance coverage:
- Dwelling (aka your unit) including improvements, alterations, additions, etc.
- Personal property, your personal belongings i.e. the stuff you own
- Loss of use providing additional living expenses when your place becomes uninhabitable due to a covered loss.
- Personal liability aka liability coverage when you’re sued or accidentally caused harm to others
- Medical payments to others for covering any issues that arose at your place, or anywhere else
I thought the condo association purchased insurance?
Your condo association or trust has purchased insurance that protects the building or buildings, the liability of the entity that owns the building or buildings, and the liability of the entity’s officers and directors. This policy is a commercial policy commonly referred to as a Master Policy and its coverage is built around the language that is found in the condo association By-Laws or Declarations. These documents will detail and define the responsibilities of the Association as it pertains to their insurable interest.
So why do I need my own coverage then?
Master Policies can vary depending on the above-mentioned by-laws or declarations. However, the following items are certain not to be covered.
- Your contents are NOT covered under the master policy.
- Your personal belongings like clothes and furniture are considered contents and are not covered under the master policy. An easy way to determine what your contents are is to imagine picking up your unit and turning it upside down, whatever moves from the floor to the ceiling is contents.
- Your personal liability is NOT covered under the master policy.
- While the condo association may also be involved in a lawsuit that includes you as the unit owner, the master policy does not extend any coverage to you personally. It is important to make sure that you have your own personal liability coverage.
I already pay association fees…how much more is this going to cost me?
Your unit owner policy cost can start for as little as $200 per year. However, your personalized price depends in a variety of factors. They include:
- Your deductible
- The age of your building
- Your location
- Your chosen coverage amounts
- Additional coverage and endorsements based on master policy coverage
- Scheduled items like jewelry or art
Talk to your independent insurance agent about what coverage is right for you. Nothing is more expensive than an uncovered loss.
What other things do I need to worry about?
Since the Master Policy can vary depending on the by-laws or declarations it is important to review these documents and determine what additional coverages you will need to protect yourself. You can request these documents along with the master policy from your condo association and review them with your attorney and independent insurance agent to determine what is best for you. You may find you need additional coverage for some of the following areas.
- Dwelling: In some cases, the by-laws define you responsible for betterments and improvements, finish work, fixtures, etc. This is commonly referred to as a ‘bare walls concept’ which means that the master policy covers the exterior of the units, community-held group areas like gyms, clubhouses, roofs, gutters, and common areas. This leaves you responsible for everything on the inside of the bare wall.
- Large Deductibles: Some associations opt to save money on the master policy by increasing the deductibles and passing that cost onto the unit owners. It is important to determine what that deductible is and make sure that your policy has a limit that covers any cost you may be assessed by the association in the event of a loss.
- Loss Assessment: Your association can hold you financially responsible for costs they incur from on premise injury or building damage not covered under the master policy or exceed the master policy limit.
- Flood: Water damage caused by tidal or ground water is not covered under a master policy. If you live in an area prone to flooding you may need to purchase flood insurance.
What do I do now that I know all of this information?
Talk to your independent insurance agent about finding coverage that’s right for your specific situation.
I don’t have an independent insurance agent…
That’s ok, you can call Anastasi Insurance Agency at (508)248-1440 and talk with one of our personal lines experts that will find you the best coverage at the lowest cost.
Anastasi Insurance Agency
4 Brookfield Rd
PO BOX 1261
Charlton City, Ma 01508
Tel: (508) 248 1440
Fax: (508) 248 1447