In the United States, condo insurance costs average for 2020 is $478 for an annual premium. The cost of condo insurance policies, however, can vary greatly, and to understand why, you need to know how condo insurance works and what can affect the types and amount of coverage needed to adequately protect yourself, your condo and your property.
When you own a condo managed by a collective condo association, home insurance works differently than standard homeowners policies. While homeowners insurance offers multiple coverage types under one policy, including structural, personal property, liability, and loss-of-use coverages, your condo will get this combination of coverage from distinct policies.
Structural coverage for your condominium building and your individual coverage will come from the condo associations and your master policies, respectively. These policies are strictly for the repair or rebuilding of the structural components and don’t offer any of the other coverage types found in standard homeowners insurance. Those will come from your condo insurance policy.
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What Condo Insurance Covers
Condo insurance generally covers the types of coverage you would find in a homeowners policy but are missing from the master policies protecting your condo. This includes personal property coverage, liability coverage, and loss-of-use coverage.
Much like homeowners insurance, condo insurance policies will have listed of name perils that are covered and ones that are always uncovered. Covered perils can include water damage, theft, vandalism, and more.
Named, uncovered perils will generally refer to “acts of God” or natural disasters like earthquakes, floods, and hurricanes, which will need to be covered by separate policies.
How Condo Insurance Prices Can Vary
The final cost of your condo insurance will depend on how much supplemental coverage you need based on your condo association’s master policy, the area where you live, the value of your personal property, and how much coverage you need overall.
Your Condo Association’s Master Policy
There are two different kinds of condo insurance master policies that your condo insurance will carry, which can impact the coverage limits of condo insurance you’ll need to buy:
If your condo association carries an “all-in” master policy, all of the fixtures in your condo, including appliances, wiring, plumbing, and some flooring will be covered. This does not, however, cover any of your personal property,
On the other hand, if your condo association’s master policy is “walls-in” or “bare” policy, only the structural components from your condo’s wall and out are covered. Depending on the specific policy, you might not even have coverage for your plumbing and electrical systems.
How Location Impacts Cost
Location can impact condo insurance costs in two ways:
- The cost of living, and therefore the cost of insurance, is relatively higher or lower based on the area.
- The area is prone to certain natural disasters (including earthquakes, floods, or hurricanes) that require additional condo insurance policies to adequately cover the property.
In reality, the frequency of natural disasters can also drive up the price of standard condo insurance policies that don’t even cover those events, as insurance companies will raise premiums across the board to financially buffer their profits in the event that they have to cover damages for a large number of policyholders in the area.
Premiums for condo insurance can be particularly higher in coastal regions, which can have the impact of being within high-risk regions for flooding and/or hurricanes, as well as often having a relatively higher cost of living.
As a result, few states have average condo insurance costs close to the national average of $478 per year. Of all 50 states and D.C., only 10 have an average within a 10% difference of the national average (between $430 and $526), and when state average costs differ from the national, the discrepancy can be extremely wide.
The top 5 states with the cheapest average condo insurance have premiums that are almost 50% of the national average.
- Wisconsin – $240
- Utah – $251
- North Dakota – $263
- South Dakota = $269
- Iowa – $272
In comparison, the top 5 most expensive state averages for condo insurance range between 116% to 200% the cost of the national average.
- Oklahoma – $558
- New York – $740
- Louisiana – $701
- Texas – $740
- Florida – $960
The most expensive states for condo insurance all have a high risk of natural disasters (OK – tornados, LA and TX- floods, hurricanes), a high cost of living (NY), or a combination of the two (FL).
The national average for condo insurance can give you a ballpark idea of how to budget for condo insurance if you’re not sure where you’re going to live, but don’t evaluate policies based on that number once you’re actually shopping for condo insurance. Make sure you know what the average cost is in your area so you can make sure you’re getting a reasonable cost for the coverage you’re purchasing.