Owning a condominium has certain benefits over owning a traditional single-family home. You don't typically have to perform maintenance on the home, your yard work is done for you and the insurance costs are less. If you're thinking of buying a condo, you may wonder about the average cost of condo insurance, but unfortunately there is no easy answer. Condo insurance costs depend on a number of different factors.
Traditional homeowners insurance premiums are based primarily on the amount of coverage you buy for your home, but condo insurance doesn't include this coverage at all because your homeowners’ association insures the main structure. Condo insurance premiums are driven by the amount of contents coverage you buy. If you have a lot of belongings with high value, your insurance cost will be significantly higher than someone with fewer items.
Real Property Coverage
You may have to insure part of your building despite the homeowners' association insurance policy. Some HOA policies only protect up to the studs, leaving the individual owners to protect the walls and any interior attached furniture, such as cabinets, counters and ceiling fans, themselves. If you have to buy any real property coverage, your premiums will be higher than someone whose HOA policy covers the entire main structure without restriction.
HOA policies typically have large deductibles, which means that an HOA claim can cost the association a significant amount of money. Sometimes, associations divide the deductible by the number of members in the association and assess each member the appropriate amount of money to cover it. Some insurers offer coverage on condo policies that would allow the insurer to pay this assessment for you, in exchange for increased premiums.
Type of Building
Though condo policies don't cover the primary structure, the type and construction of your building may influence your premiums. Buildings made of brick, for example, are less likely to burn than wood frame structures, and therefore your contents are less likely to burn as well. The number of units in your building could also affect your premium rate, because a greater number of units decreases the likelihood of any fire being in your individual unit.
Many other factors could influence your premiums as well. Some insurers offer discounts if you have sprinklers installed, if you do not use tobacco products or if you have certain safety devices like deadbolts or alarms. You may also get package discounts by having more than one type of insurance policy with the same insurer. Because of these variables, there can be a wide range of costs for condo insurance even within the same insurance company.
Stephen Hicks has been writing professionally since 2000. He recently published his first novel, "The Seventh Day of Christmas." He spent three years as a licensed life and property/casualty insurance agent in California. Hicks holds a Bachelor of Fine Arts in cinema studies from New York University.