3 Must-Have Insurance Policies for Condo Owners

By Ressie Krabacher

As a local resident and top performing REALTOR® in Chicago, Ressie Krabacher is relentlessly focused on helping her clients move forward. She serves as an advocate and advisor for buying or selling, overseeing relocation, or adding home ownership to their financial goals.

Living in a condo here in the city has benefits: it’s low maintenance and has great amenities but comes with unique insurance needs. With the help of Erin M. Millington from Millington Insurance Solutions, we will break down condo insurance, also called an HO6 policy, in a way that’s easy to grasp. My goal is to help you protect your investment without stress.

What is condo insurance? When you buy a condo, the condo association usually has a master policy that covers the building’s exterior, like the roof and siding. On the other hand, your condo or HO6 policy protects the inside of your unit, like your walls, floors, and everything within the “studs.” Unlike regular home insurance, an HO6 policy is specifically designed for condo ownership.

To make sure you’re fully protected, here are the three most important things to focus on when setting up your condo insurance:

1. Interior rebuild coverage. Start by looking at your condo’s square footage and any upgrades, like custom flooring or a renovated kitchen. Imagine a catastrophic loss, like a fire, and estimate what it would cost to rebuild the interior. This is your starting point for coverage. Work with your insurance agent to get a solid value estimate to avoid falling short if disaster strikes.

2. Loss assessment coverage. This one protects you if the condo association faces a major loss, like a roof replacement, and the master policy’s deductible is split among owners. Your condo bylaws will outline your share of this “deductible.” Without loss assessment coverage, you could be on the hook for thousands out of pocket. Review your bylaws with your agent to ensure you have enough coverage.

3. Affordable deductible. Choose a deductible you can comfortably pay if you need to file a claim. A deductible that’s too high might save you on premiums, but could be a burden during a loss. Balance affordability with protection to avoid surprises.

I’ve worked with condo owners who thought their association’s policy covered everything, only to face big bills after a loss. You can avoid these headaches by reviewing your master insurance, reading your bylaws, and working with a trusted agent who can help you understand your HO6 policy and secure the right coverage.

If you have questions about condo insurance or need help finding the right policy, don’t hesitate to reach out to Erin at (630) 854-3366 or emillington@millingtonis.com. For other real estate needs, directly contact me at (773) 965-4100 or ressie@kw.com. As always, I’m here to serve.