Many elements of condo owner insurance and renter’s insurance are similar, but condo owners face greater risk of loss and an increased need for insurance. The primary difference between owner’s and renter’s insurance is coverage for the interior condominium structure – the walls, ceiling, floors, doors and appliances. In the case of renters, landlords are responsible for insuring the interior of the units or homes they rent, but condominium owners need special insurance, known as “Homeowners Form 6”, to cover the interior of their home unit.
Individual condominium units usually are part of a larger building. Typically, condominium communities purchase a master policy to cover potential liability issues and damages to common property areas – the exteriors of buildings, recreational areas, elevators and hallways. As with other association expenses, the insurance is paid from the assessment fees each owner contributes to the common budget. Individual condo owner insurance bridges the gap to provide owners coverage not provided by the master policy. It is the responsibility of each unit owner to insure their interior square footage, personal property, liability and loss of use. “What happens if my washer overflows and damages the property next door or below me?”
Basic Facts on Renter’s and Condo Insurance
1) Renter’s insurance is typically inexpensive, as there is no need to cover building structures. As a result, the premiums for personal property and liability protection can cost as little as $150 per year.
2) It is important for condo owners to understand the terms and coverage of their association’s master policy. Most association policies only cover the external structure of condo units, so it is up to individual unit owners to effectively protect their own investment against risk of loss.
3) Renters and condo owners have several options for extending coverage for special content categories such as art collections, expensive electronic systems, jewelry, etc. Usually, property policies have set limitations for designated categories, but riders or special endorsements are available for at additional premium cost. Renters and owners also can select the overall amount of property and liability coverage.
4) Flood and earthquake damage insurance also are not covered in standard policies, but may be available by special endorsement. In some areas of Florida, for example, insurance companies will not provide coverage from flood or wind damage within certain distances from coasts, rivers and bays.
5) Water back-up is another option condo owners should explore, as it may not be included in standard condo policies. Owners may opt for coverage that insures against damages or loss caused by the back-up of sewers and drains.
You’ll enjoy far greater peace of mind, when you know that you have protected your home and belongings with the appropriate kind and amount of insurance coverage.