How Much Condo Insurance Do You Need?

While the law doesn’t require you to have condo insurance, your mortgage company might. Like homeowners insurance, condo insurance helps protect your property in case of damage.

Choosing a dwelling limit

The homeowners association (HOA) master policy may or may not cover your walls. Estimate the cost to repair or replace any elements of your condo that are your responsibility, including your cabinets, floors, and certain built-in appliances.

Choosing a personal property limit

Make an inventory of all the items you have, including furniture, electronics, appliances, and clothing. Choose a coverage limit that best reflects the total cost of all this personal property.

Some items in your home might have separate limits of coverage under your policy. For example, your jewelry, coin or stamp collection, silverware, and portable electronic devices will have coverage limits far lower than the value of each item. To properly insure these valuables, consider adding an endorsement to your policy.

Choosing a loss assessment limit

A standard HO-6 policy usually comes with $1,000 of loss assessment coverage. Look at your HOA bylaws, which usually outline what is the HOA's responsibility and what is the condo owner’s. The HOA might pass on the cost of a deductible to condo owners. Use this kind of information to guide your decision.

Choosing a liability limit

We don’t like to think about it, but accidents happen. Consider your risk of being named in a lawsuit if a visitor is injured at your home. Also add up the value of your personal assets, which could be at risk from a liability claim. If you think you may need limits higher than those offered, weigh the benefits of an umbrella policy.

Remember: Higher Limits = Higher Premium, but Higher Deductible = Lower Premium

Choose a deductible that reflects what you can afford to pay out of pocket toward a loss.