Condo Insurance: What's Typically Included?
September 19, 2025
7 minutes
Thinking about buying a condo? Here’s a reality check: the association’s insurance is not enough to protect you. Many first-time buyers are surprised when they realize how much responsibility falls on their shoulders after closing. If you’re preparing to own your first condo, you’ll want to understand what’s covered, what’s not, and how to avoid expensive mistakes.
Two Policies, Two Different Purposes
Condo ownership comes with two types of insurance:
- The HOA’s master policy – covers the building and common areas.
- Your HO-6 policy – covers your individual unit and belongings.
Lenders require an HO-6 policy if you have a mortgage. Even without a loan, it’s essential protection. Here’s what it usually covers:
- Dwelling Coverage (Coverage A): Protects the inside of your condo. Think drywall, flooring, cabinets, and built-in appliances.
- Personal Property (Coverage C): Covers your belongings like furniture, electronics, and clothing-even if they’re stolen while you’re traveling.
- Liability Coverage (Coverage E/F): Protects you if someone gets hurt in your unit or if you cause damage to another unit. A typical policy includes at least $100,000.
- Loss of Use (Coverage D): Pays for temporary housing and daily living expenses if your unit becomes unlivable due to a covered loss.
Why the HOA Master Policy Isn’t Enough
Don’t assume the HOA’s policy covers everything inside your unit. Master policies usually fall into one of three types:
Policy Type | What HOA Covers | What You Must Cover |
|---|---|---|
Bare Walls-In | Only the exterior framing and shared areas | Everything inside, including drywall, flooring, cabinets, fixtures, plumbing, and wiring |
Walls-In | Interior surfaces but often not permanent fixtures | Fixtures, structural components, and upgrades |
| All-In | Original fixtures, wiring, carpets, and built-ins | Upgrades and personal belongings |
Before buying, ask your HOA for a copy of the master policy. Compare it with your HO-6 policy to avoid coverage gaps.
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Common Financial Traps for Condo Owners
Condo insurance is more than checking a box. Here are the areas where many buyers fall short:
- Betterments and Improvements: Upgraded your counters or flooring? The master policy usually only pays to replace the original materials. You need “improvements and betterments” coverage in your HO-6 policy.
- Deductibles and Assessments: HOA deductibles can run high. You’re often responsible for a share. Loss assessment coverage can protect you if the HOA passes along costs for building-wide damages.
- Excluded Events: Standard HO-6 policies don’t cover floods or earthquakes. If your condo is in a high-risk zone, your lender will likely require separate flood insurance.
- High-Value Items: Jewelry, firearms, or collectibles are often subject to low limits. If you own valuable items, consider a personal property floater for full coverage.
How to Figure Out How Much Coverage You Need
Start with a simple question: if the worst happened, how much would it take to put your life back together?
- Dwelling Coverage: Enough to rebuild or repair everything inside your unit, plus upgrades.
- Personal Property: Add up the replacement cost of your belongings. Creating a home inventory is worth the effort.
- Replacement Cost vs. Actual Cash Value: Replacement cost pays for new items. Actual cash value only pays the depreciated amount. Go with replacement cost if you want peace of mind.
Managing Your Policy and Costs
Insurance doesn’t have to drain your budget if you manage it wisely:
- Shop Around: The average HO-6 policy costs $531 per year, but prices vary by state and provider. Compare multiple quotes.
- Ask About Discounts: Bundling condo and auto policies or installing security systems can lower your rate.
- Review Your Policy Annually: Renovations, upgrades, and new purchases change your coverage needs. Don’t let your policy fall behind.
- Know the Market: Condo insurance costs are rising across the US. Aging buildings and stricter underwriting standards are part of the reason. Expect premiums to keep trending upward.
A Takeaway for First-Time Buyers
If you’re new to condo ownership, don’t overlook insurance. The HOA policy won’t protect your personal space, your belongings, or your financial future. Your HO-6 policy is the safety net that fills those gaps.
Think about it this way: would you rather pay a few hundred dollars a year for solid coverage, or thousands out-of-pocket after a fire, flood, or accident?
Final Thought
Condo insurance is not one-size-fits-all. The right coverage depends on your HOA’s master policy, your personal belongings, and the upgrades inside your unit. For first-time buyers, understanding this balance is the difference between a smart purchase and an expensive surprise.
Are you ready to sit down with your HOA documents and match them against the coverage you’ll need? That’s the first real step toward buying your condo with confidence.
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As a great communicator with excellent negotiation skills, I focus more on establishing unbreakable ties between my clients, as opposed to just helping them achieve their real estate dreams. As a representative of both buyers and sellers, I understand how to lead a transaction process to ensure that the needs of both are met. My track record speaks for itself. Since I ventured into the industry in 2013 as a realtor, I have not only helped many buyers land perfect homes, but I have also assisted tons of owners and investors build wealth.