By Efrain E. Sora CPIA TRA | Sora Global Insurance & Consulting LLC
1. The Master Policy Doesn’t Cover It All
Your condo association likely carries a master insurance policy that covers the building’s common areas — hallways, the roof, elevators, and possibly the exterior structure. However, the extent of this coverage varies:
- Bare walls-in: Covers the structure but not any interior fixtures, finishes, or personal property.
- All-in: Includes some built-in appliances, cabinetry, and fixtures — but still excludes personal items.
It’s crucial to review your association’s policy so you know where their coverage stops and yours must begin.
2. You Need an HO-6 Condo Insurance Policy
An HO-6 policy is designed specifically for condo owners. It typically includes:
- Dwelling coverage: For interior walls, flooring, and built-ins.
- Personal property coverage: For your belongings like furniture, clothing, and electronics.
- Liability protection: Covers you if someone is injured inside your unit.
- Loss of use: Pays for temporary housing if your condo becomes uninhabitable due to a covered loss.
- Loss assessment: Helps cover your share of damage or liability assessed by the association for common areas.
3. Know the Value of Loss Assessment Coverage
If a storm or accident damages shared areas — say, the pool or clubhouse — and the master policy isn’t sufficient, the condo association may levy an assessment on unit owners. Loss assessment coverage in your HO-6 policy can protect you from a large unexpected bill.
4. Flood and Windstorm Insurance May Be Separate
In coastal or flood-prone areas, flood insurance and windstorm coverage may not be included in your condo policy. Don’t assume you’re covered — ask your agent about separate policies for these risks.
5. Understand Deductibles and Special Assessments
Some associations have high deductibles on their master policy (sometimes $10,000 or more). If a claim originates in your unit, you could be on the hook. It’s smart to have enough coverage in your policy to cover the association’s deductible.
Final Thought
Condo insurance isn’t one-size-fits-all. Work with an experienced insurance advisor who can review your association’s master policy and tailor your HO-6 coverage accordingly. A small investment in the right protection today can prevent major headaches — and costs — down the road.
Efrain E. Sora CPIA TRA | Sora Global Insurance & Consulting LLC