Investing in a condo comes with its own challenges compared to other rental property types. For instance, you need to get a special type of insurance in order to protect your condo investment from damage and yourself from liability.
But how much is condo insurance? Does it cost more or less than other types of real estate insurance? What factors determine the cost of condo insurance?
We will answer these and many other important questions in this article.
Key Takeaways
- Condo insurance cost depends on multiple factors, the most important ones of which include the market and local risks, the property age and condition, the policy coverage and limits, and the credit score and claims history.
- The cost of condo insurance varies widely by coverage, state, and company.
- There are many things real estate investors can do to reduce how much they pay for insurance for their condo.
- When choosing the right policy, it’s important to do due diligence, consider different options, and talk to various companies to find the best price.
Key Factors Influencing Condo Insurance Costs
Condo insurance is different from landlord insurance in the sense that it is specifically designed for condominium units that are used as primary residences.
However, condo insurance rates and landlord insurance costs are determined by very similar factors, including:
Location and Real Estate Market Trends
Just like everything else in real estate investing, the first factor that affects how much is condo insurance is location.
Condos located in areas that experience frequent wildfires, hurricanes, storms, and other natural disasters cost more to insure because of the higher risk.
Similarly, markets with high crime rates are more expensive.
On the other hand, condo insurance premiums are lower in neighborhoods that are located close to police stations and fire departments.
The Age and Condition of the Condominium
Second among the most important condo insurance cost factors is the property itself.
In general, older buildings that are in poor condition and in dire need of repairs cost significantly more to insure. Meanwhile, well-maintained condominiums present a lower level of risk, which comes with lower premiums.
You also need to consider the building materials used for your property. Condos that are made with fire-resistant construction materials incur lower insurance costs.
Type of Coverage and Policy Limits
Third, the condo insurance terms also affect the cost. The more extensive the policy coverage and the higher the limits, the more expensive the premiums. If you opt for comprehensive property damage coverage as well as all-inclusive personal liability, this will cost more than if you opt for just the basic coverage.
Additionally, lower deductibles specified in the policy are associated with higher condo insurance costs.
Credit Score and Claims History
Last but not least, you – the condo owner – also impact the price. Having a better credit score can lower your premiums.
Moreover, if you haven’t filed landlord insurance claims for 5 or more years, this will send a positive signal to the insurance company, and it will offer you a better deal on your condo insurance.
Average Condo Insurance Rates in the US Market
Average condo insurance costs in the US housing market
According to NerdWallet, the average cost of condo insurance in the US is $455 per year. However, how much you pay depends on a few different factors, as we outlined above. So, some condominium owners might end up spending a couple of hundred dollars, while others might need to pay as much as a few thousand dollars.
We researched multiple sources to find out the average condo insurance costs in the US market based on coverage, state, and insurance company.
How Much Is Condo Insurance by Coverage?
Naturally, the dwelling coverage limit and the personal property coverage limit are main determinants of condo insurance cost. If you own a luxury condo and high-end belongings, it will cost more to recover them in case of loss or damage, which necessitates more coverage. This, in turn, inflates the insurance premiums for condominiums.
Table 1: Average Condo Insurance Cost by Coverage
| Coverage Limit | Average Monthly Rate | Average Annual Rate |
| $13,999 and under | $31 | $372 |
| $14,000-$19,999 | $32 | $384 |
| $20,000-$25,999 | $34 | $408 |
| $26,000-$31,999 | $35 | $420 |
| $32,000-$37,999 | $34 | $408 |
| $38,000-$43,999 | $35 | $420 |
| $44,000-$49,999 | $35 | $420 |
| $50,000-$74,999 | $40 | $480 |
| $75,000-$99,999 | $45 | $540 |
| $100,000 and above | $71 | $852 |
How Much Is Condo Insurance by State?
As we mentioned above, location significantly impacts the cost of condo investment insurance. States with higher property prices and more frequent severe weather incur higher insurance costs when investing in condos.
The 5 states with the cheapest cost insurance are:
- Wisconsin: $22 per month, $264 per year
- Utah: $23 per month, $276 per year
- Iowa: $24 per month, $288 per year
- North Dakota: $24 per month, $288 per year
- South Dakota: $26 per month, $312 per year
The 5 states with the most expensive cost insurance are:
- Florida: $91 per month, $1,092 per year
- Louisiana: $63 year month, $756 per year
- Texas: $60 per month, $720 per year
- Oklahoma: $55 per month, $660 per year
- Mississippi: $51 per month, $612 per year
Table 2: Average Condo Insurance Cost by State
| State | Average Monthly Rate | Average Annual Rate |
| Alabama | $47 | $564 |
| Alaska | $34 | $408 |
| Arizona | $36 | $432 |
| Arkansas | $46 | $553 |
| California | $48 | $576 |
| Colorado | $36 | $432 |
| Connecticut | $34 | $408 |
| DC | $31 | $372 |
| Delaware | $37 | $444 |
| Florida | $91 | $1,092 |
| Georgia | $45 | $540 |
| Hawaii | $30 | $360 |
| Idaho | $36 | $432 |
| Illinois | $34 | $408 |
| Indiana | $30 | $360 |
| Iowa | $24 | $288 |
| Kansas | $34 | $408 |
| Kentucky | $33 | $396 |
| Louisiana | $63 | $756 |
| Maine | $29 | $348 |
| Maryland | $27 | $324 |
| Massachusetts | $37 | $444 |
| Michigan | $31 | $372 |
| Minnesota | $28 | $336 |
| Mississippi | $51 | $612 |
| Missouri | $34 | $408 |
| Montana | $34 | $408 |
| Nebraska | $30 | $360 |
| Nevada | $38 | $456 |
| New Hampshire | $29 | $348 |
| New Jersey | $38 | $456 |
| New Mexico | $35 | $420 |
| New York | $47 | $564 |
| North Carolina | $42 | $504 |
| North Dakota | $24 | $288 |
| Ohio | $27 | $324 |
| Oklahoma | $55 | $660 |
| Oregon | $31 | $372 |
| Pennsylvania | $33 | $396 |
| Rhode Island | $45 | $540 |
| South Carolina | $42 | $504 |
| South Dakota | $26 | $312 |
| Tennessee | $40 | $480 |
| Texas | $60 | $720 |
| Utah | $23 | $276 |
| Vermont | $29 | $348 |
| Virginia | $31 | $372 |
| Washington | $33 | $396 |
| West Virginia | $27 | $324 |
| Wisconsin | $22 | $264 |
| Wyoming | $34 | $408 |
How Much Is Condo Insurance by Company?
When buying landlord insurance for condos, it’s important to get quotes from a few different companies. This is because different companies charge very different rates, as you can see from the table below, showing some of the best condo insurance companies in the US.
Table 3: Average Condo Insurance Cost by Company
| Company | Average Monthly Rate | Average Annual Rate |
| Allstate | $46 | $552 |
| American Family | $44 | $528 |
| Auto-Owners | $32 | $384 |
| Farmers Insurance | $51 | $612 |
| Liberty Mutual | $65 | $780 |
| Nationwide | $45 | $540 |
| Progressive | $84 | $1,008 |
| State Farm | $27 | $324 |
| Travelers | $42 | $504 |
| USAA | $56 | $672 |
However, if you want to get cost-effective condo insurance specifically designed for a condo rental, you should turn to Steadily. They specialize in homeowners insurance for rental property of all kinds, whether rented out on a short term or long term basis. Their policies are focused on the needs of real estate investors and their investment properties. Meanwhile, the premiums are affordable, and the coverages are comprehensive.
Comparing Condo Insurance with Other Types of Landlord Insurance
As a type of real estate insurance, HO-6 insurance is both similar to and different from other kinds of policies meant for investors in rental properties.
Condo vs. Single Family Home Insurance
When investors talk about condo insurance, they typically refer to a policy that focuses on the condo unit. This is different from a master policy, which is usually obtained by the HOA and which covers the common areas inside and outside, the common roof, the external walls, and the amenities.
Thus, the main difference between insurance for condominiums and for single family homes is that the former covers only the housing unit, while the latter covers the entire structure plus additional structures and the outside areas. They both include the personal property of the owner and personal liability in case anyone gets injured on site.
In terms of cost, the condo insurance estimate is usually lower because it only protects the unit, and the rest is handled by the master policy.
Condo vs Multifamily Insurance
Although condominiums are part of multifamily buildings, condo insurance is different from multifamily insurance. The latter covers all housing units within a building in addition to extra structures, inside and outside common areas, external walls, and the roof. In this way, it is similar to single family home insurance but includes more housing units.
Condo insurance costs significantly less than multifamily insurance because of the more limited coverage. Indeed, the price is usually a few times smaller because multifamily insurance is close to commercial-grade insurance.
Special Considerations for Condo Investments
When choosing the best condo insurance for your investment property, you need to take into consideration a number of factors pertinent to this type of property.
First of all, you have to review the HOA policies and regulations and check if they stipulate anything related to insuring the individual units. Some HOAs might have specific requirements when it comes to the coverage needed for units, and this will definitely affect the cost of your condo insurance.
Moreover, you need to understand what type of coverage the master policy provides. While you don’t want overlap between the two policies as this would increase the cost, you don’t want to leave a gap either in case a potentially covered event occurs in your unit or the common areas. As a real estate investor, you want to be well protected, and the first step to this is to be well informed.
Third, you need to take into account the purpose of investing in a condo. If you plan to rent out your condo unit, regular condo insurance will not suffice as it’s meant to protect units that are used as primary residences and owners who live on site. In case you want to rent out your condo, you will need special rental property insurance.
Still, you have to consider your rental strategy as Airbnb insurance is different from standard landlord insurance.
So, all these factors have to be kept in mind when selecting the right condo insurance policies for investors and their properties as they affect both the level of protection and the cost.
How to Save on Your Condo Insurance Cost
Here are some tips to reduce your condo insurance cost
Overall, condo insurance costs have been going up in the US market due to inflation and a high rate of expensive natural disasters. As the cost of insurance adds up to the operating expenses incurred by rental property investors, it’s important to reduce it as much as possible, without negatively affecting the level of coverage. In this way, you can boost your cash flow and return on investment from your condo rentals.
Here are a few tips on how to reduce the price of your condo insurance:
Comprehending Coverage and How It Affects Cost
First and foremost, you need to get a clear understanding of what’s included in your condo insurance coverage and how it impacts the cost. Of course, more coverage costs more, so you have to find a way to strike the best balance between coverage and cost.
The choice of what you include should be dictated by the market, the local risks and perils, the property age and condition, the property materials, the value of your personal property, and – of course – the purpose of buying and owning a condo.
In general terms, there are certain things that are covered by all condo insurances, some things that can be added based on need, and other things that are typically excluded.
Let’s take a quick look at those as they have a major impact on the cost:
What Is Included
The cost of typical condo insurance covers:
- Condo unit and its interior like interior walls, ceiling, flooring, cabinets, etc.
- Owner’s personal property such as furniture, appliances, electronics, clothing, jewelry, valuables, etc.
- Owner’s personal liability including both medical expenses and legal costs in case a third party gets injured on the property
- Loss of case in case a condo becomes uninhabitable due to a covered event
- Fire, storms, hurricanes, and lightnings
- Power surges and water damage
- Theft, burglary, vandalism, etc.
What Is Optional
Meanwhile, depending on your particular situation, you might need additional coverage that goes beyond the typical condo insurance. This will cost additionally, and in most cases you can choose from:
- Flood insurance
- Earthquake insurance
- Water back-ups
Each one of these add-ons comes at its own cost, which you need to understand and factor into your rental property analysis before adding to your policy.
What Is Excluded
Finally, some things are simply not covered by condo rental insurance, no matter how extensive the coverage and expensive the premium. These include:
- Tenant’s personal property in case you rent out (this is covered by renters insurance)
- International damage inflicted by a tenant
Shopping for the Best Rates
The second thing you can do to significantly reduce your condo insurance cost – without necessarily impacting the level of coverage and protection – is to shop around. There are hundreds of potential companies, and as you can see from Table 3 above, prices can be very different.
Thus, to find cheap condo insurance in your area, it’s recommended to get a condo insurance quote from a few different companies, including both small local providers and large national firms. You should also contact an independent insurance agent as they might be able to get you the best deal in the local market. While most companies don’t have a condo insurance calculator on their website, you can get a quote within a few minutes by filling in an online contact form.
When comparing different providers, investigate the specific coverage they offer, the available add-ons, the included deductibles, the required premiums, and the experiences of other homeowners and real estate investors with each company. It’s a good idea to read online reviews on reliable websites to make sure that companies are easy to work with should a covered event occur.
Increasing Deductibles
A third way to decrease your condo insurance premium is to raise the deductibles. This is the amount that gets subtracted from your claim payout and that you are responsible for paying yourself.
In other words, the more you are willing to pay out of your own pocket if something happens, the lower the cost of your condo insurance. On average, you can save 10% on your premium if you increase the deductible by $1,500. However, make sure that you choose an amount that you are comfortable with and that you can afford to pay without risking running a loss on your investment property.
Understanding Discounts and Bundling Options
Last but not least, make sure that you research and take advantage of all available discount options. For instance, you can save big by paying annual premiums instead of monthly premiums. You can also benefit from discounts when bundling a few different insurance products – like homeowners insurance, condo insurance, other landlord insurance, and auto insurance – under a single policy.
Furthermore, if you maintain your condo unit well, this will reduce the cost of insurance. Installing home security systems also brings down the cost of condo insurance as your property is perceived as lower risk.
Get a Condo Insurance Quote Through Mashvisor
While getting your condo investment property properly insured is a must in good property management practices, condo insurance costs range widely, depending on a multitude of factors. You can’t do much about many of these factors (like the location, the inane risks, and the property age), but you have certain control over other factors (like the property condition, the availability of a home security system, and the bundling of multiple insurances). As a smart real estate investor, you need to do diligent research, study different options, and take good care of your condo to reach the right balance between protection and cost.
If you’d like to get access to the best insurance for short term and long term condo rentals, check out Steadily, a premium provider of rental property insurance. To get started, just fill in the form below.
FAQs
How Much Is Condo Insurance in Florida?
The average cost of condo insurance in Florida is $91 per month or $1,092 per year. These rates make Florida one of the most expensive US states to get your condo investment insured. However, the cost can vary depending on the city, the neighborhood, the property size and current market value, and other factors.
How Much Is Condo Insurance in California?
The average California condo insurance price is $48 per month or $576 per year. This rate is rather affordable in the US market. Nevertheless, the exact cost can be within a wide range, depending on the city, the area, the proximity to a fire station, the property condition, and many other factors.
How Much Is Condo Insurance in NJ?
The average cost of condo insurance in New Jersey is $38 per month or $456 per year. This rate places NJ among the cheapest states to get HO-6 insurance in the US. The exact price, nonetheless, is determined by the city, the neighborhood, the property state, the coverage, and other considerations.
How Much Is Condo Insurance in Massachusetts?
The average condo insurance cost in Massachusetts is $37 per month or $444 per year. These rates make Massachusetts condo insurance rather affordable for investors. But the exact price you’ll need to pay depends on your city, neighborhood, condo condition, availability of home safety devices, and other factors.
How Much Is Condo Insurance in NYC?
The average cost of New York City condo insurance is $53 per month or $636 per year. Although NYC is an expensive real estate market, condo insurance costs less than in other markets. The precise price, though, is determined by the area, the local risks, the property condition, and other factors.
How Much Is Condo Insurance in Chicago?
The average Chicago condo insurance cost is $47 per month or $564 per year. This rate is affordable for Chicago condo investors. The exact price depends on the neighborhood, the condo state, the property age, and other factors.
