Are There any Differences Between Condo Insurance and Homeowners Insurance?

If you buy a condo, you have different insurance needs than the person that buys a house. While they are both places to live, they have completely different circumstances.

When you buy a house, you are responsible for the interior and exterior of the home. If something breaks or needs replacement, it’s on you. When you buy a condo, though, you are only responsible for the interior of the building. The exterior is a part of the ‘common areas’ and is handled by the association. If something breaks or needs replacing on the exterior of the unit, you are not responsible.

The common areas that the condo development has isn’t only managed by the association, but also insured by them. In other words, you only need to insure the interior of your building when you buy a condo.

How Much Dwelling Coverage do You Need?

Your dwelling coverage is what covers you should your home or condo be completely destroyed. If you own a house, you will need enough dwelling coverage to rebuild the interior and exterior of your home. The dwelling coverage should also include any extras, such as fences, sheds, or detached garages.

If you own a condo, you only need enough dwelling coverage to reconstruct your unit’s interior. It’s up to the association’s insurance policy to cover the costs of rebuilding the exterior portions of the building. You may also want to check with your association to see if their policy includes any coverage for the interior of your unit(s). Some policies do cover a portion of it, which would decrease the amount of dwelling coverage you need.

How Much Liability Coverage do You Need?

Liability coverage is like a blanket policy. It protects you against bad things that happen to you even while not at your home or condo. For example, if you hurt someone (not intentionally) while away from your home and they sue you, your homeowner’s insurance or condo insurance may cover you. Of course, liability coverage also covers accidents that occur on your property. If you own a condo, you’ll need enough liability coverage to cover anything that could happen inside your unit. Anything that happens outside of your unit, such as a slip and fall, would go under the condo association’s liability coverage.

If you own a home, though, you’ll want enough liability protection to cover both the interior and exterior of the home. Extra attention should be paid to this coverage if you have a pool, trampoline, or any other ‘dangerous’ activity on your land that someone could potentially hurt themselves on. If you have any of these, you may want to increase your liability coverage.

How Much Personal Property Coverage do You Need?

Personal property coverage is the one area that both homeowners and condo owners will need a similar amount on. The actual coverage you need depends on your personal belongings. Do you have expensive jewelry or antiques? Think about your clothing, electronics, and other precious belongings. Anything that is expensive to replace, should be considered a part of this insurance.

Keep in mind that many insurance policies have limits on their personal belongings coverage. For example, if you have a very expensive ring, its full value may not be insured under your general personal liability coverage. Instead, you may need to add a rider to the policy that covers the cost of the ring. The same is true for any other ‘expensive’ belonging you have that you are trying to insure.

The best thing to do is talk to your insurance agent. Ask him about the types of coverage you need and what the different options are that you have at your disposal. You don’t want to pay for insurance that you don’t need, but you also don’t want to underinsure yourself and put yourself in a bad financial situation. Shopping around with different insurance agents will give you a better idea of what types of coverage you need in your home or condo.