Around 73.9 million Americans live in HOAs or condos. That means more than 1 in 4 of us need some kind of condo insurance to protect our homes if something goes wrong.
Unlike regular homeowners, people who own condos do not own the building or the grounds. These are cared for by the condo board and they have their own insurance in place. If you're a condo landlord, you need condo insurance for landlords to protect yourself and your tenants in case things go wrong.
Read on for our condo insurance guide.
What Is Condo Insurance for Landlords?
Condo insurance for landlords can seem pretty complicated. As a landlord who owns a condo, you're the intermediary between the condo board and the tenant. The fact is that all three parties need insurance.
The condo corporation needs to have a commercial policy that protects the entire building. This includes liability insurance in case anyone has an accident on the premises. One of our best condo insurance tips is to get familiar with that policy.
Condo insurance for landlords needs to fill the gap left by the condo insurance policy. Typically, the condo insurance policy does not cover anything that happens in your unit.
Condo insurance for landlords covers:
- Liability - if someone gets injured in the condo (tenant or their guest)
- Fixtures
- Contents insurance for furnished condos
- Lost rent - this is a key feature of landlord policies
- Tenant damage coverage
- Loss assessment coverage
Scenarios Covered by Landlord Condo Insurance
Remember the scene in "Frasier" where the insurance assessor slips on mayonnaise in his uninsured kitchen and breaks her leg? In that case, Frasier had to cover all her medical expenses and then some. That could happen to you if you don't have adequate condo insurance.
Accidents happen and so do lawsuits. Liability insurance gives you peace of mind in case an unfortunate event happens.
If there's a water leak or a fire in your condo, you need coverage for your fixtures. You don't want to have to pay out of your own pocket for remediation work and install a new kitchen or bathroom.
While your condo is being renovated, your tenants will have to move out. That could leave a black hole in your finances as the rent will stop coming in. Protect yourself by adding lost rent insurance to your condo policy.
What Is Loss Assessment Coverage?
Owning a condo brings with it both convenience and a lot of responsibilities.
If a shared loss event occurs, such as a severe storm that causes significant damage to the outside of the condo, you may be liable for the shared loss. Of course, the condo's insurance policy should cover the greater part of the loss. But if there are extra charges, this coverage can provide protection in certain situations.
Can I Get Airbnb Insurance?
If your condo allows you to rent out your apartment as an Airbnb, you'll need to get proper insurance. This is a different situation from a regular rental and it will require different insurance. Don't assume that you're covered by your current policy.
Talk to your insurer about your options. Some insurers simply don't provide this type of coverage. But if you want to explore this option, your insurance broker will help you to find the right level of coverage.
What Isn't Covered by Condo Insurance?
Condo insurance does not cover the regular wear and tear that naturally happens to apartments over the years. Every landlord should budget for regular repairs and renovations. They'll keep your rental in great condition and command the highest possible rent.
Another key exception is that, like homeowners insurance, condo insurance doesn't usually provide flood protection. If your condo is on the first floor or you're in a flood risk zone, it's a good idea to shop around and buy some additional flood protection.
Flood insurance is often a requirement of mortgage lenders. Make sure that you check the terms of your mortgage and ensure you have all the required insurance in place.
Tenant's Possessions
If your rental is furnished, you can buy coverage for your possessions. However, this will not extend to cover your tenant's possessions.
It's a good idea to make it a requirement in the lease that tenants take out personal property insurance. If there's a break-in, they will be covered.
Is Condo Insurance a Requirement?
In Massachusetts, there is no state requirement to have condo insurance. However, it is still highly recommended. It's very likely that your condo association bylaws will make it a requirement.
They may require you to file a copy of your policy with the association each year, proving that you're covered.
Even in the unlikely event that it's not required, our condo insurance advice for landlords is to get condo liability insurance as a bare minimum. This will cover your legal fees and any medical bills that arise from bodily injury or damage to your property.
How Can You Save Money on Condo Insurance?
Condo insurance for landlords can get expensive. But there are a few simple things you can do to bring the cost down.
First of all, work with an independent insurance broker who can access deals from multiple insurers. They partner with various insurers and may be able to get deals that are not available simply by searching online yourself.
Increasing the level of your deductibles is another way to reduce your premiums. Just make sure that you have the cash to cover these if you need to make a claim on your policy.
It's also cheaper to pay in full each year rather than pay monthly. If you choose the pay monthly option, you're effectively buying insurance on credit, which makes it more costly.
Choose Econosurance for Condo Insurance for Landlords
At Econosurance, we're 100% committed to finding the best deals for our clients. We take the time to truly understand your situation and won't stop searching until we find you the best condo insurance for landlords.
