When you buy a condo, you own that property. But your condo is also inside a building whose common areas are jointly owned by all the owners in the building. This might leave you a bit confused about how homeowner’s insurance would work for your condo. In this condo insurance guide, we shall look at the different kinds of condo insurance.
Types Of Condo Insurance Coverage
Condo insurance can be tricky, and as such, you have to clearly understand each type of policy to ensure that you get the proper coverage for your needs.
The Master Policy
The building’s master policy is there to cover all the common parts of the building. If something happens to a common area, it’s the master policy that will cover any insured damages.
Importantly, the master policy typically does not provide coverage for the interior of your condo. For that, you’ll need your own policy. To decide what level of policy you need, first you’ll need to find out how your building’s master policy is set up.
There are three levels of coverage: Bare walls, Single entity, and All-inclusive.
The Bare Walls Insurance policy generally only covers the building’s actual structure and the fittings and other things initially placed by the owner. As a unit owner, this means that your personal property is not covered.
The Single Entity policy typically covers the building structure and original fittings and furniture provided in individual units and the shared spaces. However, neither your personal property nor upgrades are covered under this policy.
Under an All-Inclusive policy, coverage usually applies to each condo’s structure and fixtures and covers renovations made by you or a previous owner. Your condo unit will be fully restored if there is any damage done to it. But your personal items are still not covered under this policy.
The HO6 Insurance Policy
This policy is your homeowner’s insurance and covers design features of your condo and personal property that would not be covered under the building’s master policy.
Find out what kind of HOA master policy is in place for your building. After that, you will need to do a home appraisal to know how much you may need to rebuild your unit. Generally, for condo insurance, you need more HO6 insurance if your HOA policy is not all-inclusive. This is the only way to ensure that you are adequately covered with condo insurance.
Need more help figuring out how much insurance you need for your condo? Reach out to your HOA to find out more about your master policy first. Or, if you live in a Hales Property Management-managed building, reach out to us directly!