Owning a condo in Colorado offers the benefits of homeownership with fewer maintenance responsibilities. However, condo insurance differs from traditional homeowners insurance, and understanding the right coverage can help protect your investment. Whether you own a condo in Denver, Boulder, or Colorado Springs, this guide will help you navigate the essentials of condo insurance.
What is Condo Insurance?
Condo insurance, also known as HO-6 insurance, provides coverage for your individual unit, personal belongings, and liability protection. Unlike homeowners insurance, which covers the entire property, condo insurance works alongside the Homeowners Association (HOA) master policy, filling in coverage gaps that the association does not provide.
What Does Condo Insurance Cover?
A standard condo insurance policy typically includes:
- Dwelling Coverage (Interior Unit Coverage)
While the HOA’s master policy covers the building’s exterior and common areas, your HO-6 policy protects the interior of your condo. This includes:
- Walls, ceilings, and floors.
- Built-in appliances and fixtures.
- Any upgrades or renovations you’ve made.
- Personal Property Coverage
This covers your belongings, such as:
- Furniture, electronics, and clothing.
- Appliances and personal valuables.
- Damage caused by theft, fire, or water leaks.
- Liability Coverage
If someone is injured in your condo or if you accidentally damage a neighbor’s unit, liability coverage helps pay for:
- Medical expenses.
- Legal fees if you are sued.
- Property damage to another person’s condo.
- Loss of Use Coverage
If a fire or other disaster makes your condo uninhabitable, this part of your policy covers:
- Temporary housing costs.
- Additional living expenses, such as meals and transportation.
Understanding the HOA Master Policy
Your condo association carries an HOA master insurance policy, but it’s important to know what it does and doesn’t cover. HOA policies typically come in two types:
- Bare Walls Coverage: Covers only the building’s structure and common areas. You are responsible for everything inside your unit, including walls, flooring, and fixtures.
- All-Inclusive Coverage: Covers the exterior and interior of your condo, including built-in appliances and flooring. However, personal belongings are not covered.
Check with your HOA to determine what type of coverage they provide, so you can fill in any gaps with your personal condo insurance policy.
How Much Condo Insurance Do You Need?
To determine the right amount of coverage:
- Assess Your Personal Belongings: Take an inventory of your valuables to estimate replacement costs.
- Review the HOA Master Policy: Understand what’s covered and what’s not.
- Consider Additional Coverage: If you own high-value items like jewelry or artwork, you may need additional endorsements.
Common Condo Insurance Exclusions
Standard condo insurance policies do not cover:
- Flood damage (a separate flood insurance policy is needed).
- Earthquake damage (requires a separate rider).
- Normal wear and tear or maintenance issues.
Final Thoughts
Condo insurance is essential for protecting your unit, belongings, and financial well-being. Since HOA master policies only cover certain aspects of your building, an individual HO-6 policy ensures that your personal property and liability are protected. Review your HOA coverage and work with an insurance professional to customize a condo insurance policy that fits your needs.
