10 Insurance Considerations for Your Condo in Maryland

Years ago, I took a continuing education class, and the teacher discussed condo associations.  She worked near Ocean City, Maryland.  She made a bold statement that always stuck with me.

“We don’t insure the condo for anybody unless we also insure the master.  It’s too much risk and it’s not worth the revenue.”

This took me back.  I didn’t understand.  But I made a change to my process for when my clients call in and explained they were buying a condo unit.  I required that they send me their master condo agreement.

I quickly understood why the teacher of the class made the statement.  Every Condo Association is different.

That’s why I’m writing this blog post.  It’s to provide you with a guide for what to look at when buying insurance for your condo in Maryland.

Most people think of this when buying a personal condo, but businesses buy condos just as often.

When you purchase a business condo, you’re not just investing in a living space—you’re buying into a unique form of property ownership. While buildings are a physical structure with 4 walls, with condos, you’re buying the rights to a space with air in it.  Understanding how condo insurance works and what specific considerations to account for can help you avoid expensive surprises later on.

Whether you’re a first-time buyer or a long-term business condo owner, here are 10 key insurance considerations to keep in mind to make sure you’re properly protected.

1. Understand the Master Policy

One of the most important things to do when insuring your condo is to review your condo association’s master insurance policy. Every Condo association is different.  I read one agreement that said “We will return this space to the cold dark unit it was when you bought it.”  My client explained that the unit had dirt floors and no interiors when she moved in.  I looked at her ice cream shop.  Her walk-in freezer, stainless steel counters, and mixing equipment.  None of that was there when the building was a cold, dark shell.

The Master Policy policy generally covers the building structure and common areas.

However, not all master policies are the same. There are two primary types:

• Bare Walls Coverage: Covers only the structure, fixtures, and furnishings in common areas.

• All-In Coverage: May include interior fixtures, appliances, and sometimes even flooring within individual units.

You need to know exactly what’s covered so you can purchase condo insurance (HO-6 policy) that fills in the gaps. This brings us to the next point.

2. Purchase the Right Condo Insurance Policy

The right condo insurance policy typically covers:

• The interior of your unit (walls, floors, ceilings, cabinetry, fixtures)

• Personal property

• Personal liability

• Loss of use (temporary living expenses if your condo becomes uninhabitable)

• Loss assessment coverage (more on this below)

Make sure the policy aligns with the coverage limits of the master policy and offers enough protection for everything within the walls of your unit.

3. Evaluate Your Contents Coverage

Your belongings—desks, chairs, equipment—add up fast. Your condo insurance should include personal property coverage that reflects the actual value of your possessions.

Conduct an inventory using photos or a spreadsheet and assign approximate replacement values to each item. This helps in two ways: getting the right amount of coverage and simplifying the claims process if there’s a loss.

You can also choose between:

• Actual Cash Value: Covers the depreciated value of items.

• Replacement Cost Value: Covers the cost to replace the items new (recommended).

4. Account for Betterments and Improvements

It’s very common that when someone moves into a new space, they’ll make changes to customize the unit for their purposes. 

Ask your insurer to include additions and alterations coverage for these custom upgrades. It’s especially important if the master policy is “bare walls-in,” meaning anything beyond the drywall is your responsibility.

5. Include Loss Assessment Coverage

If there’s damage to a common area and the cost exceeds what the association's master policy covers, all unit owners may be assessed a portion of the repair bill.

Loss assessment coverage helps pay your share of that bill, which could be thousands of dollars. Standard condo policies usually include around $1,000 in loss assessment coverage, but it’s smart to increase this limit if your condo is in a high-value building or has luxury amenities.

6. Consider Liability Protection

Liability coverage protects you if someone is injured in your unit or if you accidentally damage another unit. 

This coverage can help pay for:

• Legal fees

• Medical expenses

• Settlement costs

Typically, business insurance policies include $1,000,000 in liability coverage, but if you have significant assets, you may want to purchase an umbrella policy for additional protection.

7. Protect Against Water Damage

Water damage is one of the most common and costly condo insurance claims. Whether it’s a burst pipe, leaking appliance, or water intrusion from another unit, the damage can be extensive—and the lines between who’s responsible can get blurry.

Check if your policy covers:

• Pipe Bursts

• Water backup from sewers or drains (this often requires a separate endorsement)

• Mold remediation (coverage is often limited)

• 
  

And always ask about exclusions, especially if you live in a flood-prone area.

8. Check for Flood and Earthquake Exclusions

Most standard condo policies exclude flood and earthquake coverage, yet many condos are in areas where these events are a risk.

If you live in a high-risk zone:

• Flood insurance is available through FEMA’s National Flood Insurance Program (NFIP) or private insurers.

• Earthquake insurance can be purchased as an endorsement or standalone policy.

Even if your condo isn't near a river or coastline, check local flood maps and geological data—you might still be at risk.

9. Business Income and Extra Expense Coverage

If your condo becomes uninhabitable due to a covered event (like fire or severe water damage), your policy should include loss of use coverage. This helps pay for:

• Rent for a new space

• Extra Expenses to relocate

• Employee overtime

These costs can pile up quickly, so make sure your policy includes a realistic limit based on the cost of living in your area.

10. Know the Claims Process and Deductibles

Not all insurance policies are created equal in how they handle claims. Ask your agent:

• What’s the claims process like?

• How long do payouts typically take?

• Are there different deductibles for wind, hail, hurricane, or named perils?

Choosing a lower deductible means higher premiums, while a higher deductible can save you money—but leaves you responsible for more out-of-pocket costs in a claim. Balance what makes sense for your risk tolerance and budget.

Final Thoughts

Condo insurance is about more than checking a box—since every condo association agreement is different, it’s important to make sure that your policy has been customized to your situation. 

Always review your insurance annually, especially if your lifestyle changes, you renovate your unit, or your condo association updates its master policy. And most importantly, work with an experienced insurance professional who understands the unique needs of condo owners.

With the right policy in place, you can enjoy condo living with confidence and peace of mind.

Want help reviewing your current condo policy? Reach out for a free consultation, and let’s make sure you’re covered where it counts.