A homeowner’s insurance policy on a condo has crucial differences from a policy on a single-family home. With a condo, the policy (normally) only covers the interior of the unit. The HOA/maintenance fees cover the exterior and land. However, with a single-family policy, the interior, exterior, and land need to be covered.
Dwelling coverage for a condo
Dwelling coverage for a condo needs to cover rebuilding the interior of the unit — from the wall studs in. All exterior damage (if incurred) would be covered by the HOA/maintenance fees. However, in some instances, the HOA fees also cover interior condo damage fees too, which would bring down the amount of coverage required.
Liability coverage for a condo
Like most liability policies, you’ll need to be covered if someone gets injured inside your property, ie. in your condo unit. However, all exterior coverage (hallways, grounds, lobby, pool, etc) will be covered by the HOA/maintenance fee.
Personal property insurance
Your HOA master policy will not cover personal belongings, so that is the responsibility of the homeowner. You’ll want enough protection to cover the total value of all your belongings. The easiest way to do this is to take an inventory of all your belongings so you’ll know how much coverage is enough.
Why condo owners should consider an umbrella policy
Any time you are living around other people, there is a chance of a disagreement with a neighbor. Someone may think you make too much noise in your condo that caused them to lose sleep, or you damaged their car in the parking lot, or worse injured them in the parking lot. Whatever the reason, there is a chance that these issues won’t be covered by your condo policy or the HOA fees, should the disagreements escalate. An umbrella policy covers people when they’re sued after an event that transpired at their home, in their car, or because of something they did.
When discussing homeowner’s insurance with your agent it is also a good idea to mention an umbrella policy and see what kind of a deal they can offer.