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To compare condo insurance quotes, you need to know what you’re looking at. Two policies can be very different when you look at the fine print. At the end of the day, there are a lot of variables to compare when shopping for condo insurance.
To compare HO-6 policies, you need to look at common variables such as exclusions, coverage limits, and deductibles, but you also need to know what your HOA’s master policy specifically covers before you even begin to shop around. On top of all that, you need to consider loss assessment coverage.
While condo life may seem simpler than owning a typical standalone house in some ways, it can be more complicated in other ways. But knowing what to look for in condo insurance can save you a lot of money the next time disaster strikes.
Key Points
• Always get quotes from multiple companies and compare coverage amounts.
• A lower monthly premium may require more out-of-pocket expenses than you’re prepared for.
• You’ll need your HOA master policy before shopping for an HO-6 policy.
• Deductibles, endorsements, and exclusions all affect the cost of your monthly premium.
• The cheapest policy may be leaving out coverage that you’ll need one day.
Why You Need to Compare Condo Insurance Quotes
For many, finding the best condo insurance quotes means finding the cheapest option. However, the cheapest isn’t always the best. Insurance policies are about financial protection, and if your policy doesn’t protect you, it’s not doing its job.
When comparing multiple policies, examine how companies structure their policies and pay close attention to features such as deductibles, coverage limits, exclusions, and endorsements. From there, monthly premiums enter the equation.
Unfortunately, each company calculates risk differently, which is why premiums vary so widely from company to company. Location also plays a major role in your price quote.
But as a condo owner, you also have the added variable of needing to know what your HOA’s master policy covers and what it doesn’t cover. In fact, you’ll need to know this information before you even begin to shop around for condo insurance.
What is condo insurance if your HOA already has a master policy? It offers liability protection, covers your personal belongings, and insures your individual unit.
Information You Need Before Getting a Condo Insurance Quote
Before you start contacting companies for quotes, make sure you have the following information ready.
Your HOA Master Policy Details
The HOA master policy specifies which parts of the building are protected and insured and what you as a condo owner are responsible for.
There are essentially three types of HOA master policies:
• Bare walls coverage
• Single-entity coverage
• All-in coverage
The type of policy your HOA has determines how much coverage you need on your personal condo, so this is not something to skip and figure out later.
Estimated Value of Your Personal Belongings
This may take you the most time. Make an inventory of all of your possessions and estimate the value of everything you own. Don’t exclude anything. If you were to lose everything in a fire, you’d have to start at square one, so you need an appropriate personal property limit to avoid potentially being underinsured.
Cost of Interior Upgrades and Fixtures
Done any improvements on your condo? New hardwood floors or granite countertops? If so, you’ll definitely want to factor those costs into your dwelling coverage.
How to Compare Coverage Limits Across Quotes
Don’t simply compare prices when comparing quotes. Make sure you actually compare the coverage provided by each policy and insurance provider.
Coverage A: Dwelling (Walls-In Protection)
Dwelling coverage helps condo owners repair or rebuild after a covered loss. What the provider will cover depends on your HOA’s master policy, but you can reasonably expect the following to be covered:
• Flooring
• Cabinets
• Countertops
• Interior walls
• Built-in appliances
Any quote you receive from a provider must reflect the cost to replace what your HOA master policy will not cover.
Only consider the lowest premium if it provides you with enough dwelling protection.
Coverage C: Personal Property
Theft, fire, vandalism, and some weather-related losses may cause you to need personal property protection.
When you calculated the total value of your belongings, you were determining how much personal property protection you needed. So, the first thing you need to do is check the coverage limits and make sure they cover the total value of your personal possessions.
Next, look at replacement cost versus actual cash value. Actual cash value accounts for depreciation. Replacement cost accounts for what it would actually cost to replace your items, which means it is the more expensive of the two.
If you have any high-value jewelry, artworks, paintings, or collectibles, you will want to look at any special limits the provider has on those types of items to ensure you have the right amount of coverage.
Coverage D: Loss of Use
If your condo becomes uninhabitable after a covered event, loss of use coverage will help pay for living costs, such as hotel stays and food expenses.
The key thing when evaluating coverage D is to make sure the coverage amounts are sufficient for your area.
Coverage E: Personal Liability
In the event you’re held liable for accidentally damaging someone else’s property at your home or if someone is injured while at your condo, coverage E will help protect you financially. In addition to medical bills, it also helps cover legal expenses. Personal liability coverage is one aspect of condo insurance that you want to carefully consider when comparing quotes.
Loss Assessment Coverage
Sometimes an HOA’s insurance plan is not enough to cover damages. When this happens, the HOA will turn to its members for the remaining costs, which is what loss assessment coverage helps with.
You may want to review your HOA’s current plan when deciding how much loss assessment coverage you want. As with personal liability, there’s no minimum amount you’re looking for. The more you can comfortably purchase, the better off you may be one day.
How to Compare Deductibles and Premiums
Coverage amounts and premiums just tell part of the story when it comes to affordability. The last variable you need to look at when determining whether you can afford a policy is the deductible.
Standard vs. Hurricane Deductibles
A standard insurance deductible is a set amount policyholders are expected to pay out of pocket when a claim is made. Amounts range from $500 to $2,500.
A hurricane deductible is different. Hurricane deductibles are reserved for claims caused by hurricane-related damage. The deductible is typically calculated as a percentage of the home’s insured value, with 2% being common. Therefore, if you’re insured up to $250,000, you would be expected to pay $5,000 out of pocket should hurricane-related damages occur to your condo.
If you live in an area susceptible to hurricanes, make sure you understand how much both deductibles are with each policy when comparing quotes between companies.
Balancing Monthly Costs with Out-of-Pocket Risk
When looking at condo insurance costs, remember this: The higher the premium, the lower the deductible, and vice versa.
But everything has a cost.
If you’re looking for a lower premium, consider your emergency savings. How much of your own cash could you put towards a claim after a covered event? If you have healthy savings, you may be able to afford the costs that come with a lower premium.
Everything revolves around your risk tolerance and the environment in which you live. Is your local weather always posing a threat? Are break-ins common? How likely do you think you will be to file a claim in the not-so-distant future?
Hidden Exclusions and Endorsements to Watch Out For
A common mistake when hunting for condo insurance is to forget about policy exclusions, which may be the reason one policy is cheaper than another.
Some of the most common exclusions include:
• Flood
• Earthquakes
• Sewer backups
• Natural wear and tear
If you feel as if you need the exclusion to be covered, you may be able to be covered by asking for an additional endorsement. However, you may need to purchase a completely separate policy, such as you would for flood or earthquake coverage.
The Takeaway
The best condo insurance isn’t always necessarily the policy with the best price. Compare policies by reviewing each of the variables listed above to truly understand what you are and are not getting. The question isn’t always, can you afford a policy? The question is sometimes, can you afford not to have it?
If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.
SoFi brings you real rates, with no bait and switch.
FAQ
Does comparing condo insurance quotes hurt my credit score?
Comparing condo insurance quotes shouldn’t hurt your credit score because many companies do a soft credit check rather than a hard one.
How many condo insurance quotes should I get?
The choice is up to you, but having at least three to compare should give you enough data to compare and contrast.
Can I get a condo insurance quote online?
Yes, it’s easy to find condo insurance quotes online today so you can quickly compare prices and coverage.
Are all HO-6 condo policies the same?
No, not all HO-6 condo policies are the same. While they will have a lot of structural similarities, the specifics of each policy can vary greatly. Always compare exclusions, coverage limits, deductibles, and endorsements.
Why are my condo insurance quotes so different in price?
The specific coverage amounts may differ, and the companies may also have different risk assessments and underwriting procedures. All of these variables can change the cost of the monthly premium significantly.
Photo credit: iStock/South_agency
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