A unit owner must buy a separate insurance policy to protect his home's interior and his belongings. The homeowners association keeps hazard insurance on the building and shared areas, but not on the contents and fixtures of individual units. A condominium hazard insurance policy for a unit is commonly an H0-6 policy, with a blend of various protections.
Condo hazard insurance covers items and fixtures within the condo unit against natural perils, theft and vandalism. Liability coverage protects the unit owner against lawsuits from someone she injured or damage she caused to another person's property. Liability amounts vary by policy, but covered costs include money won in a lawsuit against the unit owner and her legal fees. Some condo hazard polices include coverage for costs related to the unit being unlivable -- such as hotel fees -- because of a damage by a covered event. A guest who is hurt in the unit has some coverage for medical expenses arising from the injury.
Various factors impact the premium of a condo hazard policy, including the cost to replace items in the unit and the level of coverage the unit owner chooses. A lower deductible -- the amount the unit owner must pay before coverage kicks in -- raises the cost of a policy. Anti-theft and fire prevention items installed in the unit typically lower the policy's premium.
Some insurers offer extended coverage against high-priced items, such as jewelry, and higher association assessments a standard policy would not cover in full. The homeowners association may charge the unit owner fees for losses and damage to parts of the unit building because of an event inside the unit. An increase in personal property loss limits is available overall or for specific item categories from some insurance companies.
Flooding is typically not covered under a standard condo insurance policy. The unit owner may have the option of getting flood insurance coverage from the government's National Flood Insurance Program, depending on the unit's location. Some mortgage lenders require condo unit policies for financing. A homeowners association may mandate some type of unit coverage as part of the condominium's bylaws for owners.
- "The Washington Post"; Condo Owners Need Their Own Insurance; Benny L. Kass; December 2006
- Quality Claims Management Corporation; "Fannie Mae Gets Smart with "Walls-In" Insurance for Condos" Ronald C. Reitz, CPPA; February 2009
- Florida's Department of Financial Services: Commercial Residential - Condo Association and Unit Owners
- Allstate: Guide to Condo Insurance