Insurance is a form of financial protection critical to your overall financial health. While the lifestyle may be similar, the difference in a Renter’s Insurance needs and a Condo Owner’s needs are significant.
Condo Owner’s Insurance vs. Renter’s Insurance: What they share.
Condo insurance shares some features with renters insurance. Condo insurance does protect the policy owner’s personal possessions. Both types of policy may offer coverages such as loss of use coverage, which provides either a dollar amount or coverage of your actual costs for loss of use of the property. Both condo owner’s insurance and renter’s insurance offer supplemental personal liability umbrella coverage, which can help protect you from financial loss in some types of personal damages lawsuits.
After those basic shared coverages, condo owner’s insurance and renter’s insurance grow different. The difference is largely in the fact that insurance companies offer condo owner’s even more types of supplemental coverage that can save an already catastrophic event from effecting the long-term financial health of the condo owner.
Condo Owner’s Insurance vs. Renter’s Insurance: The differences.
A condo owner has a greater vested interest in the dwelling. This drives the differences between the two policies. The first difference is that condo owner’s insurance also covers against actual property damage to the owner’s unit, and often covers the condo owner share of assessed common area damage by a covered event.
Another difference between renter’s insurance and condo owner’s insurance comes from your relationship with the property. In a rental situation, the property owner is the one responsible for insuring the physical premises. He will do so to protect his investment, or may be required to hold that insurance by the financing company on that property. There is no legal or contractual compulsion for a tenant to secure renter’s insurance. This goes back to the basic difference between the two: the renter’s insurance primarily protects personal property within the dwelling, while the condo insurance protects the property as well, in a model that follows the overall association model for condo living. Unless you own the condo outright, your mortgage lender will likely require that you carry condo owner’s insurance in order to protect their investment as well.
How to Select the Right Condo Owner’s Insurance Coverage.
Selecting the right condo insurance requires knowing and understanding what is covered by the association policy and making sure that your own unit policy closes any gaps in protecting both your unit and your possessions. The renter’s insurance policy buyer need only worry about ensuring the policy limits are adequate to cover the replacement costs or actual value of the renter’s possessions. The property owner’s insurance policy has no bearing on a tenant’s coverage needs.
Condo owner’s insurance can be as comprehensive as you feel you need. Some of the additional condo owner’s coverage, if you choose, may include medical payments for others (such as guests), inflation index on person property, additional living expenses, fair rental value and a host of other types of coverage. Consulting a qualified agent is the best way to determine the right fit for you on your condo owner’s policy package.