Condo Insurance 101:
What You Should Know About Covering Smaller Spaces
If you’re in the market for your first condo, you might think a straightforward home insurance policy will cover it. But that’s not true. Condo ownership differs from homeownership, and so do the associated insurance needs. Fortunately, you can apply for specialized condo insurance designed to cover your specific unit instead of your entire building. Here’s what you need to know about this type of policy.
What does condo insurance cover?
This question depends upon your condo association’s master policy. This master policy insures the hallways, pool, communal facilities, and property associated with the building. However, your association can opt for one of three policy types that offer varying levels of protection.
Bare walls coverage: The master policy coverage stops at the walls of your condo, meaning you must find insurance that begins at your unit’s studs and drywall. You’ll need coverage for sinks, cabinets, fixtures, and any improvements you make.
Single entity plans: The master policy insures most of your condo, including fixtures, sinks, and cabinets. So, you only need to cover your possessions and unit upgrades.
All-inclusive agreement: The master policy covers your walls, fixtures, sinks, cabinets, AND upgrades. This type of coverage is the most comprehensive condo insurance possible.
Once you determine the type of master policy your association has, you can find the perfect condo insurance to complement it. Just remember to check that your policy includes enough dwelling protection to cover all your personal property.
How does liability coverage differ in condo insurance?
Condo insurance only applies to a fraction of the property typically protected by home insurance policies. Since master policies cover everything outside the unit, you only need liability protection for the inside. However, litigation can still get expensive, so make sure your policy limits are generous.