There are few things as exciting as buying a condo, but doing so means making some big decisions. One of them has to do with insurance. Should condo owners purchase it, or can they get by without it? And what does it cover? If you’re wondering whether to buy condo insurance, here’s what you should know…

Do you have to buy condo insurance?

Technically, there’s no rule that says you must purchase condo insurance to buy a home. That said, if you’re planning on obtaining a mortgage, you should know that your lender will require it.

So yes, in most cases, purchasing insurance is critical. Just as importantly, it’s good to know you have coverage in case the worst happens.

Doesn’t your condo corporation provide coverage?

Your condo corporation provides limited coverage. It’s obligated to hold insurance on your behalf for damage to common elements and units caused by perils. Examples include lightning, hail, explosions, smoke, riots, and acts of vandalism (among other things).

If you make improvements to your unit, your condo corporation won’t cover the damage (regardless of the cause). Be aware that even upgrades made by a previous owner count as improvements. As you might expect, that includes renovations and remodeling work. In more specific terms, your condo corporation won’t cover anything other than your “standard unit.”

What’s a standard unit? You’ll very likely find the answer in your building’s declaration and bylaws, which will lay it out in detail. To put it simply, a standard unit usually refers to the condo as it looked when it was sold by the developer.

If you buy insurance, what will it cover?

Insurance that you purchase from a provider will go far beyond the coverage you get from your condo corporation. Here are some of the most common things it covers:

Your personal property

You can have belongings inside your condo—such as furniture, clothing, electronics, appliances, and jewelry—covered. You can choose the level of coverage that’s appropriate for you.

Improvements to your unit

Upgrades, improvements, renovations—call them what you will. If you have any work done on your condo and it gets damaged, the insurance you purchase can cover it. As is the case with your personal belongings, you can choose your coverage.

Damage to other units that starts with you

Usually, if a pipe bursts in your unit and the damage spreads to others, you’ll likely have to pay for the damages. If you have adequate insurance coverage and that happens, you’ll be protected.

Injury sustained by someone else

What if someone visits your condo and gets injured while they’re there? Fortunately, the right insurance can protect you from liability.

Should I purchase additional coverage?

While the answer will depend on your circumstances, it’s usually yes. For one thing, you’ll need it to get a mortgage. Beyond that, having some level of coverage for your belongings and any upgrades you make to your condo can provide peace of mind. The best course of action is to speak with a provider you trust—and make an informed decision about what’s right for you.

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