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Condo Association Insurance | Get a Free Quote-Econosurance

Owning a condominium comes with many risks: fires, theft, wind, and vandalism in addition to liability risks. Picking out insurance is one of the most important buying decisions the condo association is going to make, especially since their needs are unique. The insurance must provide suitable coverage for the given building while also meeting the state requirements.

This article explains what condo association insurance is, what it covers, and how to save money on the policy. 

What Is Condo Association Insurance?

First, it might be useful to clarify what a condo association is. It is an administrative unit formed by the condo owners who collectively manage the expenses, repairs, and insurance of the condominium building. While each condo owner is responsible for their personal unit, the condo association manages the common areas and structures, such as hallways, lobbies, swimming pools, elevators, and outdoor spas, and is responsible for their maintenance.  

It follows that condo association insurance protects the property managed by the association, but also establishes which parts of the building need to be insured by the individual unit owners. The policy that outlines which parts of the complex are shared responsibility is called the association master policy.

What Does Condo Association Insurance Cover?
What Does Condo Association Insurance Cover?

Condo association insurance covers the unit owners’ shared risks, including both liability claims and physical damage to the common areas of the building. The association master policy usually covers common areas, including sidewalks, roofs, and basements, and shared equipment. Each individual unit and its contents are the responsibility of the unit owner and can be insured with condo insurance

The condo association master policy generally falls under one of the three types of coverages:

  • Bare walls coverage – Under this policy, only the basic building elements, fixtures, and collectively owned furniture are covered. Any items purchased by residents for their individual condos are not included. Unit owners may also be required to insure the interior walls of their condo.
  • Single entity coverage – This one covers the structure of the building, alongside standard finishes inside the units. Any improvements undertaken by the condo occupant at their own expense are not covered. For instance, if the walls are freshly painted, or a new carpet is installed, this will not be covered. 
  • Modified single entity coverage – Also called all-in coverage. This policy covers the structure of the building together with all its fixtures, installations, and improvements. It includes upgrades made by a unit owner to their walls, ceiling, and floors. However, the unit owner will still need separate insurance for their personal property.

There are also association bylaws that can further clarify what is covered by the master policy and what is the individual responsibility of the unit owners.

Condo association insurance consists of two main protections:

  • Liability coverage – If someone gets injured in the common areas or immediately outside of the property, you could be sued. You will be covered for any legal fees or medical bills.
  • Building property protection – Most damage to the building itself, such as fire, vandalism, a falling tree, and other forms of damage, will be covered under this policy. This includes damage to the plumbing system, boilers, and other shared aspects of the structure. The master policy specifies what exactly is covered. However, damage from wear and tear is typically not covered. The building's owner is viewed as responsible for the maintenance of the structure. Additionally, flooding and earthquakes are usually not included in the standard policy. 

Prices for a standard condo association insurance can be as low as $37 per month.

Both wear and tear and damage due to pests are the responsibility of the building’s owners. Regular upkeep and pest control are seen as the minimum requirements for maintaining a property. 

Other Insurance Packages to Consider

You will also need to consider other insurance types to provide complete coverage:

  • Directors and officers liability insurance: The members of a condo association are held liable for their decisions and actions. If they are sued and a lawsuit follows, this insurance gives them coverage.
  • Crime insurance: Covers financial theft, whether it is stealing the association funds or some other assets. 
  • Equipment breakdown coverage: Useful for avoiding large expenses resulting from the breakdown of boilers, elevators, and other machinery. Since inability to use machinery can lead to loss of income, you will also have coverage for that and can keep the business running.
  • Hurricane and flood insurance: Provides coverage in the event a flood or a storm causes damage. Floods are the leading cause of property damage and flood insurance is becoming increasingly more important.
  • Earthquake insurance: Similar to flood and hurricanes, standard policies do not cover earthquakes. If your property is located somewhere known to experience earthquakes, it is worth purchasing.
  • Workers’ compensation: Any employees of the association who become injured or ill as a result of work, will be covered for medical bills and any legal fees.
  • Sewer backup coverage: Provides reimbursement when damage is caused by a sewer backup.

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How to Save Money on Condo Association Insurance

Saving money on insurance does not necessarily mean settling for inferior coverage. Sometimes it just requires taking some time to weigh different options and making sure that the policy you are getting truly matches your needs. Additionally, there are some things you can do before reaching out to an insurance provider. Here are some recommendations for lowering your insurance costs:

Shop Around

Each insurance company calculates risk differently, which can lead to different prices on policies. Getting quotes from several insurance companies gives you the freedom to compare policies and find the best deal on the market. Compare carefully using spreadsheets and other tools to help you, and pick the policy that has everything you need.

Enhance Fire Safety

Installing sprinklers and fire extinguishers reduces the risk of a huge fire. Since it is less probable that the  building is going to be severely damaged in fire, the insurance agencies can offer lower premiums.

Secure the Building

Security guards, burglar alarms, entry codes, and other security devices will reduce the risk of theft and vandalism, thereby lowering your premiums.

Increase Your Deductibles

Increasing deductibles naturally leads to lower premiums. However, when something happens, the association is going to have to pay more out-of-pocket.

List Members as Employees

When you classify directors and officers as employees, the employee dishonesty section of the policy will also apply to them This way, when someone commits fraud or other crimes, the insurance will cover it.

Review the Loss History

There might be differences between your version and the carrier’s, so make sure the carrier is aware of all the improvements made and the current condition of the property. 


We know that insurance can be tricky to navigate. If you would like to discuss your options with an insurance expert, send us an email, give us a call, or fill out the free quote form on our website.



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