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Licensed property and casualty insurance agent
NPN: 21630969
Updated
Co-op insurance is a type of homeowners insurance that protects your unit’s contents and any interior structures and fixtures you’re responsible for insuring.[1] Unlike the co-op’s master insurance policy — which covers the building structure and common areas — your co-op policy covers the features of the unit that you own, plus liability protection.
Learn more about how co-op insurance works, what it includes, and how to choose the best coverage.
Co-op insurance is a personal property policy for co-ops and condos. The terms “co-op insurance” and “condo insurance” are interchangeable.
The insurance provides “named peril” coverage for 16 specific disasters, including fire, theft, and wind.
Individual co-op insurance fills coverage gaps left by the cooperative’s master policy to more fully protect your investment in your home and belongings.
Co-op insurance is a type of home insurance designed specifically for co-op owners. A co-op is a type of homeownership in which you own shares in the corporation that owns your building. Your shares entitle you to occupy your unit, but you don’t own the physical property.[2]
This differs from condo ownership, where you own your unit. And it’s also different from owning a single-family home, where you own both the structure and the property it sits on.
If you own a co-op, it’s likely you’ll need co-op insurance — sometimes called HO-6 insurance or condo insurance. It protects your unit’s interior and personal belongings against perils not covered by the co-op’s master insurance policy. It also offers personal liability protection if someone hurts themselves in your unit or you cause property damage.
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Your co-op typically insures the building’s structure and common areas with a master co-operative insurance policy. But that policy might not cover the contents of your unit, including appliances and fixtures, or your walls. Individual co-op insurance picks up where the master policy leaves off, covering your belongings and some or all of your unit’s interior.
Your co-op’s governing documents determine what the master policy covers. It might cover everything from the unit’s walls out, for example, leaving your insurance to cover everything from the walls in.
Here are some common examples of what each type of policy covers.
Type of Incident | Covered by |
|---|---|
| Fire in building lobby | Master policy |
| Theft of belongings from your unit | Individual co-op policy |
| Storm damage to your bedroom window | Depends on bylaws |
Your individual co-op insurance generally covers your unit’s interior and your personal belongings. It also provides liability coverage and pays living expenses if damage from a covered emergency temporarily forces you from your home.
Co-op insurance typically provides “walls-in” coverage that starts at your unit’s walls, floors, and ceiling. The exact coverage you need depends on the master policy. Some master policies cover the co-op interior as it was built, including permanent fixtures, but exclude upgrades and improvements you make. Others cover only the walls, floors, and ceilings.
The personal property portion of co-op insurance protects the contents of your unit, including upgrades and improvements, in some cases.
Be aware that personal property coverage is subject to policy limits and may cover your items’ cash value rather than full replacement cost. Add-on insurance options can expand this coverage.
Personal liability insurance protects you if you’re responsible for someone’s injury or property damage, covering legal defense and judgments, up to policy limits.[3] Medical payments coverage can help avoid a lawsuit by paying the injured person’s medical bills directly.
A fire or other disaster can leave your unit so severely damaged that you have to live elsewhere while repairs are underway. Loss of use coverage — also referred to as additional living expenses — pays for accommodations, meals, and other expenses up to policy limits.
Co-op insurance policies are named peril policies that protect against 16 specific disasters, like fire, theft, and windstorms. But they don’t cover the following:[4]
Floods
Earthquakes
War
Nuclear accidents
Landslides
Mudslides
Sinkholes
Sewer backups
Normal wear and tear
Deferred maintenance
Pests
Intentional acts
If your co-op is in an area prone to severe weather, your insurer might limit coverage or charge a separate deductible for wildfires, hurricanes, and windstorm or hail damage.[5]
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Optional coverages can help fill gaps in standard co-op insurance. You’ll pay extra premiums to add them, but the additional protection might make sense depending on your needs.
Flood insurance: You can purchase flood insurance, which covers damage to your belongings and your unit’s interior, through the National Flood Insurance Program (NFIP) or a private insurance company.
Replacement cost endorsement: This insures your personal property for the cost to replace it, versus its actual (depreciated) cash value.
Loss assessment endorsement: This covers special assessments for certain expenses the co-op’s master policy or reserves don’t cover, so you don’t have to pay out of pocket.
Find the best policy for your co-op.
Co-op owners have unique insurance needs, and while no one company is best for every owner, some stand out as excellent choices for specific categories of co-op owners. Here are some of our top picks for the best home insurance companies for co-op owners based on coverage options and value, as well as financial strength and customer satisfaction.
Chubb’s premiums are relatively high, but you get a lot for your money, including a free in-home risk consultation to assess your needs. Policies provide replacement value for your property — in some areas, even if costs exceed policy limits. Loss assessment coverage is generous, at $50,000.
Comprehensive coverage
Convenient virtual damage inspections
High premiums
Online quotes not available
USAA has special military benefits, including up to $10,000 in coverage for your uniform and other personal items, while at home or deployed, with no deductible. You receive replacement cost coverage for your belongings, $5,000 in identity theft coverage, and up to $50,000 toward loss assessments.
Special perks for military members
Scores high in customer satisfaction
Available only to military members and family
Quotes available only to members
Erie provides well-rounded coverage and has some of the cheapest home insurance rates among major insurance companies. Although availability is limited, it includes high-risk states like New York, Pennsylvania, North Carolina, and Illinois, where coverage can be expensive and sometimes hard to find.
Reasonable rates
Highly ranked in customer satisfaction
Available in only 11 states and the District of Columbia
Coverage for additions or alterations limited to $5,000
The insurance you buy for your co-op is the same as you’d buy for a condo and only protects the part of the unit you own and the contents you own. The cooperative or condo association insures the building itself with a master policy.
Homeowners insurance is a type of home insurance that covers single-family homes and townhouses. And you can’t use it for a co-op or condo.
A co-op damage claim might involve your insurance, the master policy, or both. Here’s a look at what to do if you need to file a claim in a co-op.
Report the damage to your insurance company.
Contact the co-op board to report the damage.
Submit your co-op’s bylaws and master insurance policy to your insurer.
Document the damage, and try to prevent further damage.
Gather receipts, appraisals, and other evidence of your damaged items’ value.
Your insurer will coordinate with the cooperative’s insurer, if necessary, and instruct you on submitting documentation and repairing or replacing damaged items. Quick responses to your insurer’s requests can help speed up the claims process.
Co-op insurance is one of the best ways to protect your co-op, your belongings, and yourself financially. Here’s some more information about the coverage and costs.
You typically need an HO-6 home insurance policy for a co-op. HO-6 insurance covers both co-op and condos, so you might hear it referred to as condo insurance.
Yes. You pay the full cost of your individual co-op insurance policy, plus a proportional amount of the association’s master policy, through your co-op fees.
Co-op insurance is insurance designed specifically for co-ops and condos. One type of insurance isn’t better than the other. Co-op policies only insure items that are your responsibility.
Generally speaking, co-op insurance covers “walls-in” dwelling coverage for the contents of your unit that are between the walls, ceilings, and floors. Additional types of coverages include loss of use and personal liability.
Insurance rates vary by insurer and factors like your location, coverage amount, deductible, and discounts you qualify for. But co-op insurance coverage usually costs less than single-family policies because it doesn’t insure the building.
Compare co-op home insurance quotes and coverages from several co-operative insurance companies to find the best deals. Then research the companies’ financial standing and customer satisfaction using online tools like the ones on the National Association of Insurance Commissioners website.
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Licensed property and casualty insurance agent
NPN: 21630969
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