Q: Our condo is raising our monthly assessments again, this time claiming that the building’s insurance went up. Since our building has insurance, we are not sure why we need to have our own policy and are considering dropping our individual policy to save some money. Do you have any thoughts on this? — Cathy

A: Purchasing a condo apartment comes with its own set of unique considerations, especially when it comes to insurance. Although it may seem redundant to purchase insurance when the condo association already covers the building, it’s essential to understand the difference between the two types of policies.

The association’s insurance typically covers the structure of the building and common areas, such as hallways, lobbies, and amenities. This means that if a natural disaster or other incident damages the building itself, the association’s policy should cover the repairs. However, this coverage does not extend to the interior of your individual unit or your personal belongings.

This is where your own insurance policy comes into play. Often called an HO-6 policy, it is designed to cover the contents of your condo, including furniture, electronics, clothing, and other personal items. It also provides liability coverage in case someone is injured inside your unit. Additionally, it can cover improvements or upgrades you have made to your unit that the association’s policy might not cover.

Some condominium rules may even require you to have an individual policy.

First, check your community’s rules to understand the requirements. Then, review the association’s policy to see what the building’s policy covers and what it does not. This will help you determine the level of coverage you need for your personal policy.

Make sure to shop around for the best value, keeping in mind that certain events, like floods or hurricanes, may require additional coverage.

While purchasing homeowners’ insurance can seem expensive, it will prove invaluable should you have a casualty, as even most repairs, or lawyer fees should you be sued, will far exceed even the most expensive insurance premium.

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