Buying a condo often comes with a sense of relief about insurance. The association has a policy, the dues pay for it, so you are covered, right? Partly. The building’s master policy protects what everyone shares, but your furniture, your upgrades and your personal liability are usually your responsibility. Understanding exactly where that line falls is the most important step in insuring a condo.
At a Glance
- Your association’s master policy and bylaws define what the building’s insurance covers.
- A condo unit owners policy typically covers your belongings, interior improvements, liability and living expenses after a covered loss.
- Loss assessment coverage can help if the association bills owners for a shared loss.
- Flood, water backup and high-value items often need separate coverage or endorsements.
Start With the Master Policy
Every condo association carries insurance on the common property, which usually includes the roof, exterior walls, hallways, elevators, pools and grounds. What varies a lot from building to building is how much of the inside of each unit the association covers. Master policies tend to fall into a few broad types:
| Master policy type | What it generally includes | What that leaves to you |
|---|---|---|
| Bare walls | Structure and common areas only | Nearly everything inside: drywall, flooring, cabinets, fixtures, plus your belongings |
| Single entity | Structure plus original interior fixtures as built | Upgrades and improvements you or prior owners made, plus belongings |
| All-in | Structure, original fixtures and often owner improvements | Mainly belongings, liability and living expenses |
The names and details differ by association, and your bylaws may shift responsibility in specific ways. Ask your property manager for a copy of the master policy declarations and the insurance section of the bylaws. If anything is unclear, an agent can help you read them.
Pro Tip
Ask the association what the master policy deductible is. Some bylaws let the association pass the deductible to the owner whose unit caused a loss, and that amount can be large.
The Building Blocks of a Unit Owners Policy
A condo policy, sometimes called an HO-6, is designed to cover what the master policy does not. Most include these parts:
Building property or improvements
This covers the parts of the unit you are responsible for under your bylaws, such as flooring, cabinets, countertops, interior walls and fixtures. If you renovated the kitchen or bathroom, make sure this limit reflects what it would cost to redo that work today.
Personal property
Furniture, clothing, electronics, kitchenware and other belongings. This is where the choice between replacement cost and actual cash value matters most.
Actual cash value
- Pays what an item was worth at the time of loss, after depreciation
- A five-year-old couch may be valued at a fraction of its original price
- Usually a lower premium
Replacement cost
- Pays what it costs to buy a comparable new item today
- Helps you actually replace what you lost
- Usually a somewhat higher premium
Loss assessment
If a major loss to common property exceeds the master policy’s limits, or the association’s deductible is high, the board may assess each owner a share of the cost. Loss assessment coverage can help pay your portion when the underlying cause is a covered peril.
Loss of use
If a covered loss makes your unit unlivable, this can help pay for temporary housing, meals and other additional living expenses while repairs are made.
Personal liability
This protects you if a guest is injured in your unit or if you accidentally damage a neighbor’s property, such as an overflowing tub that leaks into the unit below.
Gaps Worth a Second Look
- Flood. Standard condo policies generally exclude it. Ground-floor units and buildings in flood zones should consider separate flood coverage, and some associations require it.
- Water backup. Sewer or drain backup is usually excluded unless you add an endorsement.
- Valuables. Jewelry, art, collectibles and similar items often have low sub-limits. Scheduling them separately can provide broader protection.
- Home business equipment. If you work from home, business property and liability may need their own coverage.
- Renting your unit. Short-term or long-term rentals usually call for a different policy form or endorsement.
Setting Your Coverage Amounts
- Read the bylaws and master policy. Identify exactly which interior elements are yours to insure.
- Estimate improvement costs. Consider what it would cost to rebuild your interior to its current condition, including upgrades.
- Inventory your belongings. A room-by-room video or spreadsheet helps you pick a realistic personal property limit and speeds up claims.
- Check the association’s deductible and limits. Use them to set your loss assessment coverage.
- Review every year. Renovations, new purchases or changes to the master policy can all shift what you need.
The team at Callicott Insurance Agency reviews condo bylaws and master policies regularly and can help you match your coverage to your building’s specific rules.
Frequently Asked Questions
Do I need condo insurance if my HOA has a master policy?
In most cases, yes. The master policy usually does not cover your belongings, your personal liability or many interior features. Your mortgage lender may also require a unit owners policy.
What is loss assessment coverage?
It can help pay your share when the association bills owners for a covered loss to shared property that exceeds the master policy’s coverage or falls within its deductible.
Is water damage from a neighbor’s unit covered?
Often, sudden and accidental water damage is a covered peril, but who pays can depend on the master policy, your bylaws and where the leak started. Your own policy may cover your belongings and improvements.
How is a condo policy different from a homeowners policy?
A homeowners policy covers the entire structure. A condo policy is built around the portion of the building you are responsible for, plus belongings and liability.
Bring Your Bylaws, We’ll Do the Rest
Not sure where the master policy stops? Share your association documents with Callicott Insurance Agency and we will help you build a condo policy that fills the gaps.
This article is for general information only. Coverage varies by insurer, policy and state; review your own policy or talk with a licensed agent about your situation.