March 08, 2022
Condominiums are a special kind of home—part of a larger entity, like an apartment, but owned by their occupants, like a single-family home—so they also have a special kind of insurance.
Unlike a single-family home covered by the homeowner's home insurance, a condo is typically covered by 2 separate policies: the homeowner's association (HOA) policy and the individual condo owner's policy. Here's how that makes insuring a condo different from insuring other homes.
Condos are unique in that each individual condo unit is owned separately by its occupant, but the shared structures of the condo are owned jointly by all the occupants together. These include common areas like walkways, gardens, and pools, as well as the exterior structures of the building.
There are usually 2 types of insurance covering an owned condo:
Your individual condo policy covers many of the same things as a standard homeowners policy:
As with standard home insurance, damage from specific "perils" (such as fire, vandalism, or earthquakes) may be included or excluded, and there are limits and deductibles involved. Working with an insurance agent can help ensure your policy fits your needs—such as if you need earthquake insurance for your condo.
Looking for a condo policy for your home? Get a quote or speak to an agent today
Will my HOA require me to buy condo insurance?
Every HOA is different, but in most cases, the answer is yes. If you're borrowing money to buy a condo, your lender will probably also require it.
Your HOA's "master insurance policy" covers damage to shared common areas, such as gardens and pools.
Each condo community and HOA is different, so every master policy is different. This coverage is purchased by the HOA, and it's part of what your HOA fees go toward when you own a condo. Master policies will typically cover the following:
In addition, some master policies have additional coverage, such as for damage to appliances or fixtures within individual units. Not every HOA will have this, though. Even if yours does, the coverage limits may be lower than you need.
That's why it's important to review your insurance needs annually with a licensed agent. Going over the covenant, conditions, and restrictions (CC&Rs) with an agent will help you determine the extent of your HOA's coverage, and what insurance you need as a condo owner.
What is loss assessment coverage?
If there is a covered loss to a common area or shared property of your condo that exceeds the coverage level in the master policy, your association may charge an "assessment" to each condo owner to cover the balance.
Loss assessment coverage is an additional endorsement for your individual condo policy that can cover such assessments, up to a coverage limit. (Keep in mind that it doesn't cover other assessments for general upkeep and maintenance.)
Condo insurance coverage for peace of mind
Condominium owners need different coverage than a standard homeowners insurance policy, as you're responsible for the interior of your unit as well as your belongings. AAA condo insurance can help you protect these valuable assets.
Get a quote online, or call to speak to an insurance agent.
This information is a helpful overview of a condominium policy. Coverage may vary by state or product and this is not a comprehensive description of all coverages, exclusions, definitions, or provisions that may apply. The information provided is not intended to and does not substitute for or supersede the actual language of an issued policy contract, endorsement or declarations. For specific terms, definitions, coverages, and exclusions that apply to your particular insurance policy coverage for a specified loss or peril, please read your policy contract, declaration pages and endorsements. Where this information differs from an actual policy contract, endorsement, or declarations, the terms for the policy, declarations, and endorsement that make up your issued policy will prevail.
