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How is The Cost of Condo Insurance Calculated?

Unlike homeowners, condo dwellers don’t own the building they live in. You’re here because you live in a condo. In this case, you want to figure out which factors apply to your insurance policies and how to calculate the cost of said insurance. Although some factors figure into standard homeowner’s insurance, others don’t come into play with condo homeowner’s insurance.

Here’s how a condo premium is calculated.

Because you share your building with other structures, you’re going to need two policies: a master policy and an individual policy. This way, all parties are protected when you insure the home.

HOA and Individual Insurance

Typically, your condo or homeowner’s association (HOA) will carry a master policy to insure the building and pay for accidents that occur on outside property and common areas. HOA will cover things that are included or “built-into” the condo. This includes things like cabinetry, lighting and other fixtures, plumbing and wiring, etc. However, if your HOA has a “bare walls” policy, it’s up to you to insure everything in your home besides the walls, floor, and ceiling.

There are some instances where your HOA might not pay to repair the inside of your unit after disasters, however. They might not even replace your damaged or stolen belongings or cover any liability costs.

In this case, generally you’ll need condo insurance when there’s damage to the interior of your unit. This policy will cover your personal possessions (clothes, electronics, furniture, etc.) if they’re stolen. Additionally, this policy will pay to repair or replace these items if there’s a fire, burst pipe, etc. Some of these policies will even pay for you to stay in a hotel if you are displaced by a natural disaster. It all depends on the policy you end up choosing. Keep in mind, though, that coverage in the event of a flood is very limited.

Calculating Cost

Calculating cost of your condo insurance is going to come down to figuring out your needs. A homeowners insurance calculator will help you determine quotes of different insurance plans. Read them thoroughly and figure out what it is that you need covered. For some, this includes things like personal property coverage, dwelling coverage, or umbrella liability coverage.

Consider the Deductible

As previously mentioned, your association’s master policy will also include a deductible with your plan. This deductible is typically charged pro-rata among unit owners in the event of a claim. Make sure you know what the deductible encompasses. You don’t want to be stuck with an obligation of a hefty financial commitment, without an accident ever materializing. It’s all up to figuring out how much risk you’re able to afford.

Additional Coverage

In addition to the coverage your policies will provide you, you might want to consider adding on coverage to your plan. For instance, maybe your condo is in a commonly flooding region. Things like flooding coverage, liability coverage, and replacement coverage might be appropriate for your needs as a condo owner.

See, it’s not that bad. All you have to do now is make decisions about your needs. With this guide, you’ll be able to find the best master policy as well as find additional coverage that’ll protect you in the long run.


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