insurance

Condominium Insurance

A specialized type of homeowner's insurance designed for condominium owners that covers personal property, interior fixtures, and liability within the unit, while the condo association's master policy covers the building structure and common areas. Coverage fills the gaps between what the owner is responsible for versus what the association covers.

Example

“Sarah's condominium insurance covered the damage to her kitchen cabinets and appliances from a pipe leak, while the condo association's master policy handled the structural repairs to the walls and flooring.”

Memory Tip

Condo insurance = 'Inside Your Domain' - it covers what's inside your unit and your personal domain of responsibility.

Why It Matters

Without proper condominium insurance, owners could face significant out-of-pocket expenses for damage to their personal belongings, interior improvements, or liability claims. Additionally, if the association's master policy has a large deductible, owners might be assessed their share of the cost without adequate coverage.

Common Misconception

Many condo owners mistakenly believe the association's master policy covers everything, including their personal belongings and interior improvements. In reality, the master policy typically only covers the building structure and common areas, leaving owners responsible for insuring their unit's contents and often interior fixtures.

In Practice

Tom owns a $300,000 condo and carries $50,000 in personal property coverage and $100,000 in liability protection through his condo policy, paying $400 annually. When a kitchen fire caused $25,000 damage to his appliances, cabinets, and belongings, his condo insurance covered $23,000 after his $2,000 deductible. The association's master policy separately covered $15,000 in structural repairs to the walls and electrical systems. Additionally, when the association was assessed a $50,000 deductible for roof repairs after a storm, Tom's policy included loss assessment coverage that paid his $1,200 share of the special assessment.

Etymology

From Latin 'con' (together) and 'dominium' (ownership), literally meaning 'joint ownership.' The insurance product developed in the 1960s and 1970s as condominium living became more popular in the United States.

Common Misspellings

condominum insurancecondominium insurencecondominiam insurancecondominium insuranse

Related Terms

Personal Property

More in insurance

Other insurance terms you should know

deductibleThe amount you pay out-of-pocket before your insurance begin…insurance premiumThe amount paid periodically to an insurance company in exch…deductibleThe amount a policyholder must pay out of pocket before insu…copayA fixed amount paid by an insured person at the time of a me…coinsuranceA cost-sharing arrangement where the insured pays a percenta…out-of-pocket maximumThe most an insured person will pay for covered healthcare s…