Condo Insurance Coverage

Michigan Condo Insurance

You have purchased your first condominium, and are being required by your mortgage company or your condo association to purchase insurance to protect your new condominium.

First it’s important to realize that a condominium insurance policy differs from a homeowners insurance policy. Why? – because unless it’s a stand-alone or site condo where you own the land beneath it and the exterior, you don’t need to insure the outside structure of your new home. The condominium association takes care of that insurance on the Association’s master insurance policy that all owners collectively pay for. 

There are actually 2 different types of insurance involved in condo association properties; the association’s master policy and the condo  unit-owners policy. Most associations are legally responsible to protect the exterior of the condominium buildings and any common areas that all owners have access to. As the person buying the condo, you will need to  purchase a condo unit-owners, or condo policy; also known as an HO6 in the insurance industry. 

 If you plan on renting out your condo as a traditional rental or a short term rental, then an HO6 policy is not what you need. You would instead need a rental dwelling policy. If that is the case, the rest of this blog won’t apply to you.

A condo insurance policy is similar to a homeowners insurance policy in the way that it is written and has endorsements similar to that of a home policy where you can schedule your jewelry, watercraft, and recreational vehicles.

It is important when buying a condo that you read the purchase booklet that includes the Master Deed and Bylaws of the Condo Association. This booklet will tell you exactly what parts of your unit should be insured by you and what parts of it are insured by the association’s master policy.

Your condo policy will protect your personal belongings, anything within your new unit that is your responsibility to protect, and your legal liability for injuries or accidents which result in claims against you.

Condo insurance is much less expensive than a home insurance policy, and as an agency that writes hundreds of units as well as dozens of associations, we understand the importance of educating clients on what insurance needs to be considered.