Buying a condo in NYC is no easy feat. You’ll need to have your finances in order, your goals pinpointed, and all your questions answered. For example, do you know about condo insurance? Do you need it and if so, how much coverage do you need?
Everyone has condo insurance questions. Before you sign on the dotted line for your dream condo, learn the basics about condo insurance, along with a few bonus tips, to help you buy and protect with confidence.
Do You Need Homeowners Insurance for Your Condo?
A homeowner’s insurance policy is recommended for single-family homes with outdoor property. When you own a condo, a homeowner’s insurance policy will likely include the coverage you don’t need. Condo insurance, as the name suggests, is better suited for your type of residence. A standard condo policy will provide coverage for:
- Personal property, including electronics, furniture, and other possessions, if stolen in a burglary or damaged by a covered peril
- Damage caused to another person’s property
- Temporary housing costs for a covered loss that prevents you from being able to live in your condo
- Guest’s medical payments from an injury sustained on your property
Condo insurance will only provide coverage for your living space. Your HOA should provide coverage for incidents that take place in common areas. For example, if a friend slips and falls in your condo, your condo insurance should cover any accrued medical costs. But if they slip in a common area, like the lobby, your building’s insurance policy, which you help pay for through HOA fees, should pick up the medical bills.
How Much Does Condo Insurance Cost?
The best answer to this question may be frustrating, but the cost of condo insurance depends on your unique situation. It depends on the location of your building, the size of your condo, and how much coverage you want. But to give you an idea of what you’ll be paying, here are a few price ranges to consider.
A policy costing between $300 to $400 a year will provide:
- Contents coverage up to $25,000
- Walls and floors coverage up to $20,000
- Up to $100,00 of liability claim coverage
A policy costing between $400 and $600 a year will provide:
- Contents coverage up to $50,000
- Walls and floors coverage up to $50,000
- Up to $300,000 liability claim coverage
A policy costing between $1,000 and $2,500 a year will provide:
- Contents coverage up to $100,000
- Walls and floors coverage up to $300,000
- Up to $1 million of liability claim coverage
By speaking to an insurance broker, you can find which price point will provide you with enough coverage for your condo. Based on these prices, you can secure condo insurance for as low as 82 cents a day to just under $7.00 a day.
Why Should I Buy Condo Insurance?
First, condo insurance is most likely required by your co-op, building, lender, or a combination of the three. It’s important to remember that your building’s insurance doesn’t cover your property or unit. Therefore, you’ll want to protect your investments and avoid unnecessary financial strain should the unthinkable happen.
- Water damage
- Dog bites
- Leaky AC units
- Rowdy house guests
For example, New York has the highest average cost per dog bite claim, coming in at $55,671 per claim. Without condo insurance, you and Fido could be responsible for medical and legal fees on your own. Smoke damage after a fire can cost thousands, and your cost won’t include any necessary repairs or replacement of your furniture and other lost possessions. And if a friend slips and falls in your condo, the average cost for non-surgical treatment of a broken arm is $2,500.
Is Condo Insurance Less Than Homeowners Insurance?
The average cost of condo insurance in New York is $588. The average cost of homeowners insurance in New York is $974. So the answer is that yes, condo insurance is less than homeowners insurance in New York — on average.
Insurance for an oversized condo in downtown Manhattan could be more than a tiny starter home in an outer borough. It’s best to get an accurate quote for your condo insurance than assume it will be less than a homeowners insurance policy you or a family member has paid in the past.
If A Pipe Bursts in a Condo, Who Is Responsible?
The answer to one of the most popular condo insurance questions is that it depends on the pipe’s location and the specific terms followed by your condo building.
If a pipe beneath your kitchen sink bursts and damages the cabinet, you will be responsible for the repairs as the condo owner. But if a pipe bursts in a shared wall, it can be difficult to prove who is the responsible party. Your condo agreement should provide some clarity by explaining where ownership ends within the condo walls.
If you own from the interior walls in, you’re not responsible. But some condo owners do own the interiors of their walls, including the pipes and electric. If this applies to you, there are exceptions to be aware of before you take responsibility.
If the burst pipe was caused by poor contracting work or neglect of the building, you may be able to pass financial responsibility for repairs onto the building or contracted company.
And if someone else’s burst pipe, like those noisy neighbors above you, causes water damage to your condo, their insurance should pick up the tab. As you can see, every situation needs to be evaluated. This is why it’s so important to understand exactly what you own as a condo owner and what your condo insurance coverage provides.
How Much Should You Insure Your Condo For?
The best way to find out how much to insure your condo for is to complete a cost evaluation with a trusted broker over the phone. They’ll know the right questions to ask to determine how much coverage is ideal and help you find the best combination between perfect coverage and affordability.
If in doubt, always go with more coverage. With some insurance providers, the difference between $100,000 and $1 million in coverage is pennies a day.
What Does “Walls” In Insurance Cover?
If you’ve never read a condo insurance policy for, some of the terms used to describe coverage can be confusing. Here are the three main types of coverage condo insurance provides.
This refers to the bulk of your personal property, including furniture, clothing, and electronics. Common covered perils include fire, theft, smoke, explosion, and water damage. There are built-in limits to consider for items like jewelry and silverware, but you can buy additional coverage if desired. If you telecommute for work, ask whether office equipment is covered or if a separate policy for a home office is required.
Walls and floors
Condo insurance covers the surfaces of walls and floors along with renovation work and built-in fixtures. Rebuilding a square foot in your condo can cost between a couple hundred to almost $1,000. Make sure you include enough walls and floors coverage to at least rebuild your condo to a livable standard should the unthinkable happen.
Mistakes happen and without condo insurance, you could be responsible for medical fees that aren’t your own. For example, if your clumsy friend trips over a rug and breaks their arm, their medical bills will be picked up by your insurance with liability coverage. Liability also covers damage to your neighbors and/or their property, like an overflow from your tub or sink. When you live in a condo, you can’t go without liability coverage.
Does Condo Insurance Cover Water Damage to Other Units?
Yes, as long as your policy includes liability coverage. For example, let’s say you live in an oversized condo on the second floor above three smaller condos. One day, your child plugs the bathroom sink and leaves the water running. You head to work and get a phone call from your landlord several hours later about the damage the overflow has caused to all three condos below. Without liability coverage in your condo insurance policy, you could be facing a major financial disaster.
Ask Condo Insurance Questions Before You Buy
Buying a condo can be an exciting yet intimidating process. If you have condo insurance questions, don’t be afraid to ask for answers. Purchasing a home is one of the most important choices you’ll make. Fully understanding what happens before, during, and after the purchase will make for a positive experience and smart investment.