Texas Condo Insurance
If you are shopping for a condo or are already living in one, you may have questions about the what type of insurance you need to carry. Condo insurance differs from homeowners insurance because you do not own the building or the land that your condo sits on. When it comes to the building and the land, your condo association carries a master policy that protects the building if it is damaged or destroyed by covered peril. The same goes for the common areas of your building and the outside area.
On the other hand, you are responsible for any damage that occurs inside your unit. The master policy will not replace any damaged or stolen property from inside your unit nor does it provide liability coverage if a guest is injured inside your condo, for that you need to be carrying condo/co-op insurance which is also referred to as a HO-6 policy.
What Condo Insurance Covers
A HO-6 policy is specific to the inside of your unit and covers the following in most situations:
Damage to your unit: If there is damage to the interior of your unit, your HO-6 insurance policy will cover the costs. While you don’t own the building or the common areas, you do owe your particular unit and this includes light fixtures, cabinets and all appliances.
However, there are two types of master polices and depending on which one your condo or HOA is carrying will determine whether their insurance covers certain aspects of your unit or your policy must step up and cover the damage.
- All-in HOA Policy: If your HOA is carrying this type of policy it will usually cover all original fixtures in your unit such as cabinets, lighting fixtures and even plumbing and wiring. It may cover appliances that are damaged or destroyed by a covered peril but this can vary by policy so check with your HOA.
- Bare Walls: This type of policy only covers the walls, floor and ceiling. Everything else must be protected by your own policy. If your HOA has a bare walls policy it is very important that you have a HO-6 policy in place as any damage inside your unit will fall to your policy.
Stolen Belongings: If someone breaks in and steals your belongings it will be up to your insurance policy to replace your property. Your HOA master policy will not cover your belongings. It is important to keep an up to date home inventory which will speed up the claim process and make sure you are paid quickly and fairly. There are a number of apps that can make this tedious process quick and easy.
Injured Guest: If a guest is injured in your home your HO-6 policy will help cover their medical costs as well as any legal fees or settlements if you are sued. This coverage will step up if a guest falls down some stairs, slips, is bitten by your pet or otherwise injured inside your unit.
If a guest is injured on the outside of the building or in the common areas, the HOAs policy would be on the hook for damage.
Additional Living Expenses: The majority of HO-6 policies come with additional living expenses coverage which will cover some of your expenses if your unit is unlivable due to a covered peril. As example, if your unit experienced a fire you may have to move into a hotel while the damage is repaired. The additional living expenses portion of your policy will cover costs such as hotel bills, eating out at a restaurant and even laundry costs.
Loss Assessment: If your building is severely damaged and that damage exceeds the policy limit on the HOA master policy you may receive an assessment to help make up the difference. If you have loss assessment coverage this portion of your policy will help cover your portion of the assessment.
What a HO-6 Policy Covers
Most HO-6 policies cover damage from the following perils:
- Fire and smoke
- Wind and hail
- Burst pipe and other water damage
- Injuries to your guests
However, it doesn’t cover everything, the following are typically excluded in a HO-6 policy;
- Intentional injuries to others
- Nuclear hazards
- Damage from birds, rodents and insects
- Wear and tear
- Damage from sewer backups
Condo insurance is affordable
HO-6 policies tend to be pretty affordable, but the cost will vary depending on where your actual unit is located. If your building is in the middle of a forest, oceanfront or in a high-risk flood area, expect to pay more for coverage.
According to data from ValuePenguin, the average cost of a HO-6 policy is a very affordable $478 a year but costs do vary widely by state. The average cost in Florida (the most expensive state for condo insurance) is $960.
Regardless of the cost, condo insurance is a necessity and in most cases is required by your condo association, HOA or mortgage lender.
How much coverage should I carry?
Coverage level recommendations vary dramatically depending on how much it would cost to replace all of your possessions. Do a thorough inventory of your home and determine how much it would take to replace everything in the event your unit was completely destroyed.
If your HOA master policy covers lighting fixtures, cabinets, plumbing and wiring you may be able to carry a lower amount of physical damage coverage. If your condo association has a bare walls policy you will need to up your physical damage coverage as your policy will be responsible for everything in your unit besides the walls, floors and ceiling.
The best advice is to talk to your HOA or condo association for recommendations about coverage levels.
For a Condo Insurance quote, go to: https://www.gorockland.com/condo-insurance/quote or call us at (281) 242-0020