What is the Rule of Thumb for Condo Insurance?
Understanding Condo Insurance: A Guide for Owners
Condo insurance can be confusing, especially when trying to determine what is covered under your policy versus what is covered by your condo association. Many condo owners ask: What is the rule of thumb for condo insurance? In this guide, we’ll break down the key principles every condo owner should know to ensure they have the right coverage.
The 3-Rule Thumb for Condo Insurance Coverage
1. The Condo Association’s Master Policy vs. Your Policy
The general rule of thumb is that your condo association’s insurance policy covers common areas, the building’s exterior, and shared amenities, while your personal condo insurance policy (HO-6 policy) covers everything inside your unit.
What the Master Policy Covers:
Roof, exterior walls, and hallways
Elevators and lobbies
Shared amenities such as pools, gyms, and clubhouses
What Your Personal Policy Covers:
Interior walls, floors, and ceilings
Personal belongings (furniture, electronics, clothing, etc.)
Liability protection if someone is injured inside your unit
2. The Walls-In vs. All-In Coverage Rule
Condo insurance policies typically fall into two categories:
Walls-in (Bare Walls) Coverage – Covers only the interior structure, meaning anything attached to your unit (e.g., drywall, fixtures, and flooring) is your responsibility.
All-in (Single Entity) Coverage – Includes some built-in fixtures, like cabinetry and flooring, but not personal property.
It’s essential to check your condo association’s bylaws to see which type of coverage they carry, so you can supplement with the right personal insurance policy.
3. The 20-50-25 Personal Coverage Rule
A good rule of thumb for personal condo insurance coverage is the 20-50-25 rule:
20% of your condo’s value for personal property
50% of your personal property coverage for loss of use (alternative living expenses if your condo becomes uninhabitable)
$25,000 or more in personal liability protection
Adjust these limits based on your unique needs and risks.
Additional Coverage Considerations
While these rules provide a solid foundation, there are additional considerations condo owners should factor in:
Flood and Hurricane Insurance
Standard condo insurance policies typically do not cover flood or hurricane damage. If you live in a high-risk area like Florida, consider purchasing separate flood or hurricane insurance policies to protect your investment.
Loss Assessment Coverage
Loss assessment coverage helps cover your portion of shared property damage if your condo association’s master policy doesn’t cover the full cost. This can be crucial if your community experiences a major loss, such as a hurricane or fire.
Special Assessments
Your condo board may issue special assessments to cover unexpected damages or repairs. Make sure your policy includes coverage for these expenses.
Final Thoughts: Get the Right Condo Insurance Policy
The key takeaway? Know what your condo association’s policy covers and purchase an HO-6 policy that fills the gaps. Following the 3-rule thumb for condo insurance will help you avoid costly surprises and ensure you have adequate protection for your property and belongings.
Need help navigating a condo insurance claim? Contact Shoreline Public Adjusters today for expert guidance and a free consultation!
Shoreline Public Adjusters, LLC
780 Fifth Avenue South
Suite #200
Naples, FL 34102Email: hello@teamshoreline.com
Phone: 954-546-1899
Fax: 239-778-9889
