Owning a condominium unit in Florida offers several lifestyle advantages over other forms of housing, but you still have to insure your home. The most common type of insurance for condos is a modified form of homeowners insurance known as an HO-6 policy. Here are the most important things you need to know about getting the right amount of HO-6 insurance for your Florida condo.
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What is the average cost of condo insurance in Florida?
The average cost of condo-unit-owners insurance in Florida is $997 a year, or $83 a month, according to the National Association of Insurance Commissioners. However, rates may be considerably higher in areas exposed to extreme weather and for high-value units.
Insurance companies weigh a number of factors to determine your condo insurance rate, including:
- The location, age and construction style of the complex and unit
- Safety and security features in the complex and unit
- The property and liability coverage limits you choose
- Your insurance claims history and credit
- Any discounts you may qualify to receive
Since each insurance company weighs these and other factors differently and offers different discounts, you may qualify for a considerably lower rate with one company than you do with others. This is why it’s best to compare quotes from multiple companies when you shop.
Which Florida companies offer condo insurance quotes?
Most companies that offer homeowners insurance in Florida can provide an HO-6 quote. More than half of Florida’s condo insurance policies are issued by Allstate and Citizens, according to the Florida Office of Insurance Regulation.
|Market share based on the number of policies in force, as of March 31, 2022. Source: Florida Department of Insurance Regulation.|
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Is HO-6 insurance mandatory in Florida?
There is no state mandate to purchase HO-6 insurance in Florida, but lenders typically require it for a mortgage, and homeowners associations (HOAs) often require it, too.
In Florida, an HO 6 is often called a walls-in policy, because it generally covers property inside the bare walls of your unit, including cabinets, countertops, appliances and wall coverings, as well as your belongings.
The HOA’s master insurance policy typically only covers common areas, such as entryways, hallways, a lobby, pool and portions of the building outside individual units.
The master policy also usually only covers medical and liability claims against the HOA, such as if a guest or worker is injured in a common area. An HO 6 provides coverage for medical and personal liability claims against you, such as if a visitor is injured in your unit.
Windstorm insurance is available for condos located in areas of Florida where standard HO-6 policies exclude wind and hail damage.
A standard HO 6 does not cover flood damage, but flood insurance for condos is available separately.
How much condo insurance do I need?
Most HOAs specify the minimum insurance requirements for unit owners in the association charter or by-laws, and, if you have a mortgage, your lender will include its insurance requirements in your loan agreement.
However, depending on your unit, belongings and financial situation, you may need more insurance than the minimums required by your HOA and/or lender.
Here are the key factors to consider in determining how much coverage to get for the major sections of a typical Florida condo insurance policy.
The building property coverage in an HO-6 is also known as dwelling coverage and applies to most improvements and fixtures built into your unit, including cabinets, countertops and flooring, as well as most appliances.
HOAs and lenders typically require unit owners to get enough building property insurance to restore the unit to its condition at the time of purchase. If you make upgrades, you should increase your building property limit to avoid being underinsured.
Insurance agents often use software to calculate your building property needs based on the size of your unit and the quality grade of the furnishings inside. As a rough estimate, Statewide Insurance, an agency based in Dade City, recommends building property limits of at least $50 per square foot, with higher amounts for units with custom features.
Personal property coverage
Personal property coverage protects your personal items, including clothing, electronics, recreational gear, furniture and all your other stuff.
The best way to determine how much personal property coverage you need is to create a list of your belongings and the value of each item or set. Adding up the values will give you the total personal property limit you need.
Bear in mind that condo insurance policies often limit coverage on jewelry to $1,500 and place similar sublimits on other valuables, such as collectibles, silverware and artworks. However, you can add a personal property rider to your policy for more coverage for your valuables.
You can turn your personal property list into a home inventory by filling in additional details about your items, such as their brands, model and serial numbers, and purchase dates and prices.
If you ever have to file a claim, having an updated property inventory ready to go can expedite your payment from the insurance company.
Loss of use
If a covered peril, such as a fire, leaves your home uninhabitable, loss of use covers rent and other temporary living expenses while your home is being repaired. These can include documented food and transportation costs that exceed the normal amounts you spend.
At minimum, your loss of use limit should be enough to cover at least one year’s rent for a unit comparable to your own.
Though loss of use is often offered as a percentage of your personal property coverage, it usually doesn’t cost too much to increase this limit.
Personal liability and medical payments
Florida condo policies often come with preset limits of $100,000 for personal liability coverage and $1,000 for medical payments, but raising these amounts usually also only results in nominal increases to your premium.
Medical payments coverage pays for the initial medical treatment of guests accidently injured while visiting your home, regardless of fault. The common default limit of $1,000 is usually enough for most people, but higher limits make sense for higher-end homes.
Personal liability covers injuries and damage to others resulting from your neglect, such as if your lack of upkeep causes a guest to injure themselves from a fall in your unit.
Liability typically also covers injuries caused by a pet, but some insurance companies exclude coverage for exotic pets, certain dog breeds or dog bites in general. If your policy excludes your pet, consider getting a separate pet liability or dog-bite policy.
If you have a high net worth and/or a high salary, you should get at least $300,000 in liability coverage to protect your assets. You should also consider getting an umbrella policy for additional protection.
Florida requires insurance companies to include at least $2,000 in loss assessment coverage in a standard HO-6 policy, but this is not always enough.
HOAs use assessments to spread common expenses out among unit owners. Loss assessments generally cover damage from insured losses, including insurance deductibles.
For example, if a fire or other covered peril causes major damage to a 25-unit condo’s common areas, the HOA’s master policy typically covers the portion of repairs costs above the policy’s deductible. If the policy has a $100,000 deductible, the unit owners may be assessed $4,000 each to cover the deductible, particularly if the HOA does not have enough money available in its reserves.
Your HOA should be able to provide you with a copy of your condo’s master policy declarations and its financial statements.
If the master policy has a high deductible, it may make sense to increase your loss assessment limit, particularly if the HOA does not have ample financial reserves.
The loss assessment coverage in an HO 6 does not cover equipment worn down by normal wear and tear.
Do Florida condo owners need flood insurance?
If you apply for a mortgage for a condo in a high-risk flood zone, your lender is likely to require the HOA to have a master flood insurance policy.
This is where things get complicated. Flood insurance is usually only required for government-backed mortgages for properties in high-risk flood zones, including mortgages from any federally regulated financial institution.
Since HOAs normally don’t have mortgages, they are rarely required to purchase flood insurance. Many still do, but it’s voluntary.
To get a mortgage for a condo in a high-risk flood zone approved, you or your real estate agent typically need to provide a copy of the HOA’s flood insurance declaration page to your lender.
In general, master flood insurance policies include coverage for building property such as cabinets, countertops and flooring inside your unit. However, your lender may require you to purchase supplemental flood insurance if the HOA’s policy does not allocate enough coverage to individual units.
Your HOA or property manager should be able to let you know how the master flood insurance policy allocates coverage.
The HOA’s master policy won’t cover your personal items, but you can purchase flood contents coverage separately. This could come in particularly handy if your unit is on a lower floor.
If you live outside of a high-risk flood zone or don’t have a mortgage, you can buy flood insurance on an optional basis.
If you’re not sure about the flood risk of a condo you are eyeing, you can look it up online in the Flood Map Service Center on the Federal Emergency Management Agency (FEMA) website. Any zone beginning with the letter A or V is high risk.
Most flood insurance is purchased through the FEMA-managed National Flood Insurance Program, but private insurance companies also offer it.
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