Americans looking to buy a condominium or co-op this spring should factor in the cost of insurance before signing on the dotted line. And a new analysis shows that where you choose to live will greatly influence how much you can expect to pay to protect yourself.
A new report from insurance website AdvisorSmith calculated the average cost of condo insurance, or HO-6 insurance, in each state. The analysis found that Florida was by far the most expensive state for condo insurance.
Residents of condos and co-ops in the Sunshine State pay $964 a year for condo insurance on average. That’s nearly double the national average of $506, and well over three times costlier than the least expensive state, Utah, where condo residents only pay $269 a year on average. AdvisorSmith’s analysis was based on data from the National Association of Insurance Commissioners.
Overall, residents of the South pay far more to insurance their condo and co-op residences than people living in other states. The AdvisorSmith analysis found that 11 of the 15 most expensive states for this form of insurance were located in the South, including the other four states in the top five besides Florida: Texas ($790), Louisiana ($748), Oklahoma ($631) and Mississippi ($600).
Prone to severe weather events
“There are certainly many factors taken into account when determining condo insurance, but the location of these particular states seems to play a major role,” the report noted. In particular, all of these states are highly prone to severe weather events, including hurricanes and tornados. As the report explained, most of the top 10 natural catastrophes, in terms of the cost of damage, were hurricanes that affected Southern states.
Meanwhile, the least expensive states were ones that were less prone to disastrous weather events, as well as less populated regions. Besides Utah, other affordable states for condo insurance were Wisconsin ($280) and Iowa ($295).
Of course, other factors influence the cost of HO-6 insurance, including the size of deductible, features in the condo development and the homeowner’s association’s own insurance policy.
Unlike traditional homeowner’s insurance, an HO-6 policy only covers what’s inside the walls of your unit and not the structure itself. As such, it’s designed to mesh with the development’s own insurance policy, so a condo building with a more protective policy will allow for more affordable individual policies for each of its residents.