What Does Condo Insurance Cover in Florida?

Owning a condominium in Florida involves unique insurance considerations compared to a single-family home. This is due to shared responsibilities and common areas alongside individual unit ownership. An HO-6 policy is specifically designed for these needs. This article clarifies typical HO-6 coverages and how they interact with the condo association’s master policy.

Core Coverages of Your Individual Condo Policy (HO-6)

An HO-6 policy provides protection for the interior of your unit and your personal interests. Often called “walls-in coverage,” it primarily covers the space from the drywall inward.

Personal property coverage protects your belongings from perils like fire, theft, or storm damage. This includes furniture, electronics, clothing, and other household furnishings, whether inside your unit or temporarily outside. For high-value items like jewelry or fine art, standard policies may have sub-limits, so consider a specific endorsement for full coverage.

Dwelling or interior unit coverage addresses the interior structure of your unit. This includes walls, flooring, countertops, cabinetry, fixtures, and any improvements you have made. This coverage is crucial for repairing or replacing elements permanently affixed within your condo not covered by the association’s master policy.

Personal liability coverage protects you if you are responsible for bodily injury or property damage to others. This applies if someone is injured in your unit, or if you or a family member cause damage to someone else’s property, even away from your condo. This coverage helps pay for legal defense costs, medical expenses, and damages if a lawsuit arises.

Additional Living Expenses (ALE), or Loss of Use coverage, helps cover increased costs if your condo becomes uninhabitable due to a covered loss. This includes temporary housing, hotel stays, restaurant meals, and other necessary living costs while your unit is repaired. This coverage ensures you can maintain your usual standard of living during displacement.

Loss assessment coverage helps unit owners pay for special assessments levied by the condo association. These assessments arise when the master policy’s deductible is high or if an uninsured loss affects common areas, exceeding the association’s insurance limits. Florida law requires HO-6 policies to include a minimum of $2,000 in loss assessment coverage.

Understanding the Condo Association’s Master Policy

The condo association’s master insurance policy protects the condominium property. It covers the building’s main structure, exterior elements, and all common areas shared by unit owners. These common elements include roofs, exterior walls, foundations, lobbies, hallways, elevators, and shared amenities like pools or gyms. The master policy also includes liability insurance for incidents in these shared spaces.

In Florida, understanding your association’s master policy type is crucial, as it defines the unit owner’s responsibility for their unit’s interior. A “Bare Walls-In” or “Walls-Out” policy is the least comprehensive, covering only the building’s structure and shared areas up to the bare drywall. Under this policy, unit owners are responsible for everything inside their unit, including fixtures, flooring, appliances, and paint.

A “Single Entity” policy offers broader coverage than “Bare Walls-In.” This master policy covers original fixtures and finishes installed in the unit, such as cabinets and standard flooring. However, it does not cover upgrades or improvements made by the unit owner after initial construction, nor personal property.

The “All-In” or “All-Inclusive” policy is the most extensive master policy. It covers the building’s structure, common areas, and nearly everything within individual units, including built-in appliances, fixtures, and owner improvements. Despite its broad coverage, an “All-In” policy still excludes personal belongings. Knowing your association’s master policy type helps determine the necessary dwelling coverage for your HO-6 policy.

Master policy deductibles, especially for wind or hurricane, can be substantial and directly impact unit owners. High deductibles on the association’s policy can lead to special assessments to cover a portion of the loss. This is where your HO-6 policy’s loss assessment coverage becomes important, helping cover your share of such unexpected costs. Florida Statute 718.111 outlines the association’s insurance obligations, clarifying what they must insure and what remains the unit owner’s responsibility.

Navigating Common Exclusions and Florida-Specific Considerations

Standard condo insurance policies, including HO-6 and master policies, do not cover all damage or perils. Flood damage is a significant exclusion; neither policy covers losses from flooding. Unit owners in Florida, especially in coastal or low-lying areas, need to purchase a separate flood insurance policy, often through the National Flood Insurance Program (NFIP) or private insurers.

Coverage for mold, fungus, or bacteria is excluded if it results from gradual water damage or lack of maintenance. Mold damage is only covered if it stems from a sudden, accidental covered peril, such as a burst pipe. Damage from wear and tear, neglect, or maintenance issues like pest infestations (e.g., termites, rodents) are not covered by standard policies, as these are preventable through proper upkeep.

Florida’s unique geological conditions mean sinkhole damage requires a specific endorsement or separate policy. Standard policies exclude earth movement, including sinkholes. This is an important consideration for condo owners in regions prone to such activity.

Hurricane and wind deductibles in Florida are distinct from standard deductibles, calculated as a percentage of dwelling coverage or unit value, not a flat dollar amount. For instance, a 2% or 5% hurricane deductible on $200,000 dwelling coverage results in a $4,000 or $10,000 out-of-pocket expense. Florida law mandates insurers offer hurricane deductible options, including $500, 2%, 5%, or 10% of the dwelling limit. This deductible applies once per calendar year for hurricane-related wind damage, provided the policyholder remains with the same insurer.