Do Your Clients Need Condo Insurance Coverage?

Condo insurance protects condo owners from damages to their unit and to their personal belongings.

If your clients own a condo, they may think that their condominium association master insurance policy is enough to cover their home; however, that’s not the case. The master policy usually protects the exterior of their unit and other common areas within the community. This includes but isn’t limited to the building’s hallways, lobby, and roof and may cover claims such as vandalism, fire, theft, and more, depending on the type of policy.

While there are three standard condo master policies, including bare walls coverage, all-in coverage, and single entity coverage, none cover your client’s belongings. As a result, they may want to purchase a personal condo policy for full coverage. 

What is condo insurance?

Just like in a typical homeowner policy where coverage is provided for the dwelling; a master policy will provide coverage for the structure. But, depending on the insurance coverage wording in the condominium documents, this might leave a gap. So, the HO-6 insurance policy covers things within your client’s unit, also sometimes called “studs in” coverage. 

A breakdown of individual condo insurance coverage

Individual condo insurance protects personal property, the condo’s interior, loss-related expenses, and personal liability protection. Most individual policies will cover claims related to:

  • Personal property coverage. In case of a fire, vandalism, tornado, or another similar incident, personal property coverage protects your client’s belongings, including movable goods such as furniture, appliances, electronics, and clothing, if they’re damaged, destroyed, or stolen.
  • Personal liability coverage. If someone sues your clients for property damage or bodily injuries that occur on their property, this covers the guests’ medical expenses. For example, if your client’s friend trips and falls in their condo unit and suffers a broken ankle, their policy will cover their hospital bills.
  • Dwelling/building coverage. Much like the standard homeowner’s insurance, this provides coverage against vandalism, smoke or fire damage, storm damages, or damages related to internal plumbing within the condo unit. An example would be if a pipe bursts and damages your client’s electronics, clothing, and furniture.
  • Loss/special assessment coverage. This optional coverage covers financial obligations related to a shared loss with the condo building. For example, if a fire damages the building’s lobby and the repair costs exceed what the condo association’s master policy covers and what funds were set aside, a loss assessment will pay your client’s share to make up the difference. 
  • Loss of use/additional living expense coverage. This coverage reimburses your clients if their condo becomes uninhabitable after damages or necessary evacuation. Terms may vary depending on the policy, but the loss of use may provide reimbursement for room and board at a hotel while repairs are made to the unit. An example of loss of use is if your client’s unit suffers water damage from a burst pipe and they have to move out temporarily while repairs are made.

Finding the right condo insurance

It’s always wise for your clients to protect themselves from the unexpected. Whether it’s a weather-related incident, vandalism, theft, or fire, condo insurance provides your clients with adequate coverage for their unit and belongings outside what their condo association’s master policy will cover. It’s best to err on the side of caution and secure an individual policy for any circumstance. 

Quaker’s team of experts is here to find the best coverage options for your clients. Reach out today to explore their choices based on their specific needs.