What differentiates homeowners and condo insurance policies.
It’s no secret that the responsibilities of home ownership are very different than the responsibilities that condo owners have. These differences naturally translate into varying insurance needs. Here are the main differences between homeowners and condo insurance policies.
The Difference Between Home and Condos
First, it’s important to understand what separates home ownership from owning a condo. When you own a home, you are responsible for everything inside the home, the home’s external structure, and the property on which the home is located. In contrast, when you own a condo, you are usually only responsible for the interior of the unit. The actual structure of the building, the surrounding property, and the complex’s common areas are insured by your condominium association. This split responsibility creates unique insurance needs for the condo owner.
If you own a home, you need enough dwelling coverage to cover the total cost of rebuilding your home and the other structures on your property (such as fences, carport, sheds, etc.). Because the cost of completely rebuilding a home is considerable, homeowners need to secure high coverage limits which will translate into higher insurance costs.
In contrast, if you own a condo, you only need enough dwelling coverage to rebuild the interior of your unit. This is because all damages to the actual structure of the building (exterior walls, hallways, elevators, etc.) will be covered by the condo association.
Personal Liability Coverage
If you own a home, then your personal liability risks are higher than a condo owner’s. This is because you are responsible for all the injuries that take place within your home and on your property. Increased risk leads to higher rates when it comes to your home insurance.
In contrast, condo owners only need to worry about the accidents that take place within their unit. The liability issues that arise in your building’s common areas (outdoor spaces, pool areas, elevators, hallways, etc.) are your condominium association’s responsibility. So, because your liability risks are lower, you will enjoy lower rates than a homeowner would.
Here’s how homeowners insurance differs from condo insurance. Do you have questions about your home or condo coverage? For assistance with all your coverage needs, contact an insurance professional at Westwood Insurance Agency today.