Condominium Insurance: Do You Have Enough?Do you like saving money? Sure you do, but at what cost? This question, along with many others, must be answered after purchasing a condominium.

Along with Homeowners Association (HOA) fees and policies, you also have to think about insurance. Most condo associations provide a comprehensive insurance policy. The question you must then answer is, “Is the policy enough?” As part of your HOA dues, your insurance policy typically covers some damages caused by natural disasters such as hurricanes, floods or earthquakes to a certain extent.

Here’s where things start to get interesting. Say you purchase a condo in Florida. Instead of looking into other insurance policies, you decide that the one provided as part of your HOA dues is enough. Fast forward a year later, when a hurricane does major damage to both the exterior and interior of your condo.

No problem, everything is covered, right? Wrong! Your HOA dues go toward an insurance policy that protects the exterior structure of all condos along with shared areas inside the complex such as swimming pools and other recreational areas. It doesn’t, however, cover the interior of your condo when it comes to personal property such as TVs and kitchen appliances.

Depending on the fine print of the master policy, you may even be responsible for the cost of repairing your walls and carpet. Some policies cover these costs, but only to a certain extent. For example, say you move in and get new carpet in the living room and new wood flooring in the kitchen. Any improvements you’ve made since purchasing the condo usually won’t be covered. So, instead of replacing the brand new carpet and flooring you had installed, you’ll be downgraded back to what was there originally.

Now you’re out any electronics and appliances that were ruined and back to the original carpet and flooring. I’d guess that this series of events wouldn’t make you too happy.

That’s why it’s an absolute must that you find out what the master policy insures. From there, you’ll need figure out what else you want insured. If your condo is in an area where major natural disasters could occur, you’ll want to make sure your possessions are covered. How much coverage do you need? According to an article on, you need to come up with a rough estimate of how much other owners in the complex have paid for upgrades. By doing this, you’ll be able to take out an appropriate coverage plan.

From here, you need to pick between cash value and replacement-cost coverage. If you’re not familiar with the two, cash value can be thought of as “fair market value,” or the value of the insured item minus depreciation. Replacement-cost coverage is the cost to replace the property on the same premises with other property of comparable material and quality used for the same purpose.

Now that I’ve covered insurance policies you should consider to protect your condo against the weather, liability insurance should also be taken into consideration. Would you want to be responsible if someone slipped and injured themselves in your condo? I surely wouldn’t.

It may seem like you have a lot to consider when it comes to insurance after purchasing a condo. On one hand, it’s true; there are a lot of details to think about. On the other hand, isn’t it always better to be safe than sorry?

What do you think? Is it worth the risk to save some money by not covering holes in the master insurance policy? Let us know in the comments section below!


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