The Differences Between Homeowner and Condo Insurance

Have you recently purchased a condo and wondering whether you need specific condo insurance or normal homeowner insurance? While condo and homeowner’s insurance both offer similar coverages, there are differences, with one of the main ones being how much property the policy will cover. When you own a home, you are typically responsible for both the inside and outside of the property, including the land and any structures within the property bounds. However, condo owners are only really responsible for the inside of the unit and the contents within.

Read on to learn how homeowners and condo insurance help protect your home.

Condo Insurance Policies

There are two types of condo insurance policies, one for individual condo insurance owners and another for the condo owners’ association. Your individual condo insurance policy helps to protect your personal unit — helping to pay for damages to your home and personal belongings. A condo association insurance policy typically covers the building, including the roof and siding, and common or shared areas, such as hallways and pools. Also called the master policy, the condo association’s policy sometimes extends to the interior of the unit. In these cases, the master policy may cover standard fixtures, bare walls, floors and ceilings within each condo unit.

Typically, you’ll only need to purchase insurance for your own personal condo unit, and the association’s board will take care of getting the master policy for the building and shared spaces. However, it is a good idea to understand what the association’s policy covers and to be sure your insurance policy will help pay for necessary repairs to your home after a covered incident.

Loss Assessment Coverage

Condo owners can also add loss assessment coverage to their insurance policy. This optional coverage may help protect against having to pay out of pocket for a special assessment the association issues for expenses related to an insurance claim. If the association’s coverage limit, which is the maximum amount the insurer will pay toward a covered claim, isn’t high enough to pay for the full cost of repairs or medical bills, it might issue a special assessment to each condo owner to cover the remaining amount owed on the bills. If you have loss assessment coverage and receive an unexpected assessment from your association, you can file a claim to help cover the costs.

Dwelling Coverage

Dwelling coverage, which is also called dwelling insurance, is a feature of homeowner’s insurance that helps to pay to repair or rebuild the physical structure of a house and attached structures if they are damaged by a covered peril.

With condo insurance, however, you’ll typically only need enough coverage to repair or rebuild the interior of your unit. Repairs to the outside of the building, exterior walls, hallways, elevators, etc., would generally be the condo association’s responsibility.

Liability Coverage

If someone is injured while visiting your condo, liability coverage may help cover the related legal and medical costs if you’re found responsible for the accident. This coverage can also help if you’re found liable for accidentally damaging someone else’s property. As a condo owner, liability coverage can help you avoid paying out of pocket in these situations, but you typically don’t need liability protection for claims involving common areas. For example, if a visitor slips on the building’s front stairs and breaks an ankle, your association’s insurance will typically kick in.

Personal Property Coverage

Whether you own a condo or a single-family home, it’s likely filled with the stuff you own — from furniture to clothing. Personal property coverage protects your belongings and will help pay to repair or replace them after a covered loss. While personal property coverage is essentially the same for homeowners and condo owners, it is important that condo owners keep in mind that the condo association master policy’s coverage will not usually extend to your belongings. With both homeowners and condo insurance, you’ll need to make sure you have enough coverage to protect the value of your personal belongings.

Even though condo and homeowner’s insurance provide similar coverage, it is important to have the insurance that best fits your situation and needs. If you have questions about either condo or homeowner’s insurance, Mimbs & Associates Insurance can help.

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