Condo Insurance FAQ

Across the broad spectrum of personal insurance policies and quotes you'll find homeowners on one end and renters on the other. Somewhere in themiddle is condo owners insurance.  You're responsible for more than just your contents, but for less than you would be if you owned a single family home.

There are a lot of ins and outs, so we'll tackle the most common questions and differences here.

#1: When insuring your condo you're responsible for your own contents (furniture, television, clothes, etc....), but also for the permanent fixtures in your unit. 

What does that mean? Usually that means flooring, kitchen cabinets and counter tops, bathroom fixtures, window treatments and wallpaper/paint.  Permanent fixtures are the guts of your condo that you wouldn't take with you if you moved out.  If this were a homeowners policy, these pieces would be considered part of the house and would be covered under Coverage A (in layman's terms The House).  If this were a renters policy you wouldn't care because the permanent fixtures would be covered by the landlord (probably).

#2: How do you establish a value for this coverage typically called A&A, or Additions & Alterations?

The best way is to go room to room and estimate what it would cost to redo a bathroom, or the kitchen? What does flooring cost? What would it cost to repaint a room?  Some insurance companies will start with the total cost of replacing the square footage and then take a percentage of that, sometimes 75%, to exclude the walls and the ceiling framework.  This is a difficult decision and your agent should help out because if there is a fire or water loss and you don't have enough coverage you'll be left with a partially finished unit.

#3: Not all condo associations are the same.

Every condo association should have by-laws that lay out exactly what the unit owner is responsible for insuring.  Typically a unit owner is responsible from the drywall in, or the studs in.  It makes a difference and the insurance company will want to know in the event of a loss.

Most condo associations are set up to buy the insurance on the building itself, walls, ceiling, roof, etc...the "shell" of the building.  It's called a master policy, and it's paid for by the association's members.

#4: Losses between units

There are some condo association by-laws that say every owner is responsible for what happens to their own unit, a sort of "no-fault" situation that limits claims between owners. For example, if your upstairs neighbor has a leaky pipe that soaks into your ceiling, walls or furniture you may not be able to put in a claim on their insurance.  You may have to work with your own insurance.  On the flip side, if your refrigerator has a leak and damages the downstairs unit you also wouldn't be responsible. 

These types of situations lead to some uncomfortable chance meetings in the common areas, but those are the rules.


There is more to go over, but we'll tackle those issues another day.  Just remember, A&A (Additions & Alterations, aka permanent fixtures) should be thought of as a separate limit from your contents.

Hit me with an email or call if  you have any other questions.