Owning a condominium in Chicago means getting the proper coverage for it. Condo insurance, also known as an HO-6 policy, primarily covers portions of the interior of your condo unit, your belongings, liability and loss of use.

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Is condo insurance required in Chicago?

While neither Illinois nor Chicago law requires you to have condo insurance, it is usually required by lenders and homeowners associations. Your condo association's HOA insurance coverage is limited. It usually only covers common areas and parts of the building's exterior, as well as liability for damage or injury in the common areas. You need an HO-6 policy to cover your personal property, liability and loss of use.

You should be aware that flood damage is covered by neither your HOA insurance nor your condo insurance, but you can buy a separate flood insurance policy.

How much is condo insurance in Chicago?

According to the National Association of Insurance Commissioners, the average cost of condo insurance in Illinois is $404 a month. This is 21% less than the national average condo insurance rate of $512 a month. What you pay for an HO-6 policy is based on various factors. These include:

  • The location and age of the condo complex and unit
  • Security features in the complex and unit
  • The coverage limits you choose
  • Your insurance history

You may ask why condo insurance policy prices vary so much when they usually offer the same coverages. This is because insurance companies weigh risk factors differently. One insurer may consider your neighborhood a higher risk than another, for example, and adjust the price for a policy accordingly. We strongly recommend that you compare quotes from multiple condo insurance providers to get the best combination of coverage and cost.

What condo insurance do I need to get?

The required condo insurance limits you need should be in an HOA's charter or bylaws. If you're financing a condo through a lender, they will include the required limits in your mortgage agreement. The following types of coverage will typically be in your HO-6 policy, along with recommended limits:

Building property

Also known as dwelling coverage, the building property section of your condo insurance covers most of the improvements and built-in fixtures of your unit. This includes:

  • Cabinets
  • Countertops
  • Flooring
  • Most appliances

HOAs and mortgage lenders often require condo owners to carry enough building property insurance to cover all costs for a complete restoration of their unit. Whenever you make any upgrades to your unit, be sure to adjust your building property limit accordingly.

Personal property

Personal property coverage takes care of your belongings, including:

  • Clothing
  • Furniture
  • Electronics
  • Jewelry (usually up to $1,500)

Personal property coverage in condo insurance can also have lower limits for other expensive types of items, such as art and collectibles. If you have valuable items that would cost more to replace than your policy limit, you should be able to purchase a personal property rider to increase your coverage.

The best way to make sure you're not under- or over-insured for personal property is to compile a home inventory list. Include as many details as you can, including:

  • Brand
  • Serial number
  • Purchase date
  • Price

This will help make filing a claim a lot easier, and it could make your payout faster as well. Compiling a home inventory can initially be time-consuming, but updating it afterwards should be simple.

Loss of use

Also known as additional living expenses, loss of use (LOU) covers the extra costs that may arise if you have to relocate while your unit is repaired or rebuilt after a covered peril. This includes:

  • Rent
  • Food
  • Rental furniture
  • Laundry
  • Extra commuting costs

At the very least, you should have enough LOU coverage for a year's worth of additional expenses. Keep in mind that this coverage is only meant to take care of expenses over your standard cost of living. For example, if your monthly commuting cost jumps from $50 to $75, LOU will compensate you for the $25 overage. Condo insurance policies usually limit additional living expenses to a percentage of your personal property limit, but it can be increased.

Personal liability and medical payments

In the event that you, a family member or a pet are responsible for another's injury or property damage, personal liability covers the costs of court expenses and medical care due to neglect. Medical payments coverage takes care of costs due to the injury of a guest, regardless of fault.

Most condo insurance policies have a default liability limit of $100,000. This may seem like a lot, but a prolonged court case or extended hospital stay can hit that limit easily. Anything over the limit would have to be paid out of pocket. To secure your own finances, it's advised that you increase your liability limit to $300,000, and $500,000 if you can afford it. It usually isn't expensive to increase your limits. Medical payments coverage often has a limit of $1,000.


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