Buying a condo is a significant investment, especially in a market as competitive as St. Louis. That means you should protect your investment with insurance. However, you need a clear understanding of the types of condo insurance and their coverage.
This post will teach you about the types of condo insurance and what they cover.
Two Types of Condo Insurance Condo Owners Need to Know
Condo (HO-6) Insurance
Individual condo insurance, or an HO-6 policy, is similar to homeowners insurance. It carries some of the same protections as standard homeowner insurance. However, it also excludes some protections. The reason is that the condo association’s master policy covers some things that would be in a standard homeowner’s policy.
For example, the structure and roof have insurance under the condo association’s master policy. It would also cover liability in common areas.
Condo insurance covers what the HOA master policy can’t cover. The condo insurance coverage typically includes the following:
- Interior: It can pay for damage to elements of the condo’s interior.
- Personal liability: The policy can cover damages and legal expenses if a third party suffers injury or damages in your condo.
- Personal property: It can replace or pay for personal items damaged by a covered peril.
- Loss of use: The policy can pay for accommodations if you cannot stay in the condo due to a covered peril.
It’s also important to note the exclusions in condo insurance policies. The exclusions in standard condo insurance are:
- Earthquake and flood damage
- Sewer backup
- Equipment breakdown
Although, it’s also worth noting that condo owners can purchase coverage for these exclusions in addition to the standard policy.
Condo Association Insurance Policy (HOA Master Policy)
If your condo insurance covers everything inside your condo, the condo association policy is responsible for outside the walls. It covers the common areas and amenities such as parking lots, elevators, gyms, lobbies, etc.
The other inclusions of this type of policy are:
- Liability Protection: It covers lawsuits from injuries that may occur in common areas.
- Building Damage: The policy covers the cost of repairs to the building if damage results from a covered peril.
As you can see, the two types of condo insurance fit together. The condo association covers the building and grounds, and condo owners cover their units. Always remember to discuss your needs with a licensed insurance broker before purchasing.
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