If you live in a condominium or apartment, you will need to consider if you want home insurance.
The options available for your situation, condo insurance, and renters insurance, respectively, have differences compared to standard homeowners insurance policies that you need to know.
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What Insurance Do You Need if You Own a Condo?
If you own a condo, the housing association that runs the condominium will generally have a requirement that owners purchase condo insurance to provide coverage for the structure of your individual condo as well as the structure of the complex.
This type of coverage is offered in something called a master policy, and it will offer protection for your personal home and belongings, which wouldn’t be covered under the building’s master policy, which is maintained by the condo association.
Unlike homeowners insurance, the standard master policy for condos won’t include anything beyond structural coverage. Master policies don’t include personal property coverage, and often, liability coverage isn’t included either. Your master policy is only meant to supplement the condo association’s policy and cover what their policy doesn’t.
Your condo master policies can be either “all-in” or “wall-in.” The differences between these two types of coverage are:
- All-in master policies: These kinds of policies are considered to be for single units only, as provides coverage for everything within your condo, including wiring, plumbing, carpets, and appliances, but doesn’t provide personal property coverage.
- Wall-in master policies: These policies only cover the physical structure of the condo, from the exterior structural components inward. Unlike all-in policies, wall-in policies don’t cover fixtures or flooring.
Along with the condo association and your individual master policies, having an individual condo insurance policy, which can include personal property and liability coverage, will allow you to have financial protection similar to what would be offered in a standard home insurance policy.
Personal condo insurance would also include a type of coverage called loss assessment, which would protect you in case you damaged parts of the condominium complex collectively owned by all of the members of the condo association.
What Insurance Do You Need if You Rent?
If you’re a renter, your landlord will have to have their own homeowners insurance policy on the home or apartment where you are living. That policy’s coverage, however, won’t extend to your belongings, so renters insurance can offer a lot of benefits you should consider.
Unlike condo master policies, renters insurance offers four types of coverage:
- Personal property
- Personal liability
- Medical payments
Personal property coverage will protect you in case covered events cause your personal belongings to be damaged or lost. These events can include fire, theft, vandalism, falling objects, and others. When you need to make a claim, you would notify your insurance company, and, if your claim is approved, any costs (exceeding your deductible amount) to repair or replace your property would be reimbursed.
Personal liability would financially protect you in the event that someone was hurt while in your home or if you or someone in your household damaged another’s property accidentally. In such cases, your liability protection would cover the other party’s medical expenses, the cost to repair the damage you’d done or the legal costs to defend you in the event that you were sued.
Medical payments coverage would specifically cover the medical costs for someone injured in your home in circumstances where the injury was accidental and you were not legally liable or responsible for the other party’s injuries. This form of coverage will have much lower limits than personal liability coverage.
Loss-of-Use coverage would apply in the event that your home was damaged to the point that it was unliveable and needed extensive repairs or rebuilding. This coverage, also known as additional living expense coverage, would reimburse you for costs for finding temporary housing, such as a hotel, and any additional costs (beyond normal, expected amounts) incurred when eating out instead of at home.
What Should You Consider When Choosing a Policy?
Whether shopping for condo or renters insurance, make sure to properly consider what kind of policy you choose in terms of how claims are paid out. Policies can either pay based on the replacement cost value or the actual cash value, which takes into account depreciation and allows for cheaper insurance premiums.
While renters choose their policy, they can decide which type of claim payment suits them and their budget best, while condo owners will be obligated to go with the type of policy that matches their condo association’s master policy for both their own master policy and their personal condo insurance, as all three policies need to match.