Do I need condo insurance?

Many times, we have customers call into to our office looking for a condo insurance quote and they’ll say things like:

We didn’t know we needed insurance

Or

We thought the condo associations coverage covered us

Or

We paid cash for our condo and nobody told us we needed insurance

Before we begin to talk about condo insurance, let’s first talk about what the association’s policy covers.  Most condo associations collect monthly association dues from the unit owners.  And the board of the condo association uses the collected dues to purchase several insurance policies, among other things.  These policies are typically for liability, for the directors and officers, for the condo building, etc.  The insurance purchased by the association for the condo building typically covers the condo structure, the plumbing and electrical systems within the walls, the roof, etc.  But when it comes to the inside of a condo unit, there generally is no coverage in the associations policy.

Here’s an example to better explain coverage:

Let’s say that a condo building is damaged because of a fire.  The association’s policy will generally cover the rebuilding of the entire condo building.  They’d give you your keys, you’d open the door, and there would be an empty shell for your condo unit.  You see the internal structures such as cabinets, countertops, flooring, lighting fixtures, vanities, toilets, tubs, etc are the responsibility of the unit owner.  These features can really add up.  In a standard 1500 square foot condo, you may be looking a $75,000 or more to redo the inside of the condo unit.

And this is where condo insurance comes into play.  A unit owners condo insurance policy will typically begin coverage where the association’s policy stops.  These two policies will generally dovetail together to ensure you can get back on your feet without having to pay tens of thousands of dollars out of pocket.

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