There is a significant coverage gap between a condo association's insurance (Master Policy) and your personal condo owner insurance policies. The condo association usually covers the common areas you share with others in your building such as the roof, basement, elevator, boiler, or walkways for both liability issues and physical damage, but does not cover much else. Condo owner insurance covers a condo owner for direct damage to personal property, personal liability coverage, and medical payments coverage as outlined in the policy. It may also provide additional living expenses if you are the victim of fire, theft, or other loss listed in your policy.

When you live in a condo, you own your individual unit and share collective ownership of the rest of the complex with the other condo owners. This means that condo owners have a collective responsibility to insure the common areas such as the pool, hallways, building exteriors, etc., and the condo association collects monthly dues to pay for this insurance. Your master policy should explicitly say what areas of the complex are and are not insured by association dues.

Your condo association will usually have commercial insurance coverage for shared building and common areas. These policies come with an association deductible. Thus, if a disaster struck your complex, this deductible would be split among the unit owners. This is not a major concern if the deductible is only $5,000, but some deductibles can range up to $50,000.

After you know what parts of your condo you must insure on your own, you need to decide on how much coverage is appropriate. To estimate the coverage you need, pay attention to how much other unit owners are paying for recent upgrades, such as new cabinets, flooring, or countertops. You might also take about half the market value for interior structures to estimate your coverage needs.

Cash value coverage reimburses you only for the present cash value of the item less depreciation. Replacement cost coverage reimburses you for what it would cost to replace the item with a new model.

You should get coverage for both your personal belongings and the actual structure of the building. Remember that you only have to insure the structural items for which your condo association's master policy holds you responsible.

If you are in a flood zone, your mortgage lender might require you to have flood insurance. Wind coverage is typically included in a standard condo policy, but, if not, you can obtain wind damage coverage from the state's wind pool association. Wind coverage will help you pay for damages caused by hurricanes and other wind-related disasters.