Condominium Insurance

What type of insurance do you need as a condominium unit-owner? You will need a homeowners insurance policy form made specifically for condo unit owners, an HO-6. If you own a unit, but rent it to others, the policy form may change to a DP-6, which is designed for a tenant-occupied condominium unit. A condominium unit will be insured by a Condominium Association’s Master Policy, and the Association’s By-laws will state at what point the Association’s responsibility ends, and where the unit-owner’s begins.

The coverage provided by an HO-6 include property coverage for your Contents and “unit-owners building improvements” coverage AND personal liability coverage. Unit-owners Building Improvements coverage provides property coverage for building items not covered by the Condominium Association’s Master Policy. The Association may insure up to the unfinished walls, or may be only up to the frame not including dry-wall, interior cabinets, tiling, plumbing fixtures and more. It is very important for every condo owner to ask the Condominium Association’s Property Manager what the By-laws state.

An important optional coverage on an HO-6 is called “Loss Assessments Coverage”. If there is a covered claim to common property owned by all owners of the association, the By-laws will state that each unit-owner can be assessed a portion of any un-covered damages. If the Association’s Master Policy is not sufficient, has a high deductible or excludes coverage, each unit-owner CAN be assessed a portion of the uncovered damages. This “Loss Assessment” can be claimed on a unit-owners HO-6.

How much Contents coverage should be included on an HO-6? This is a question every owner needs to decide for themselves. Consideration should be given to “replacement cost” of all contents (furniture, clothes, appliances, carpeting (may be contents, or may be considered under building improvements).

As with all insurance-buying decisions, consult with your insurance professional to see what coverage is right for you.