What's the Difference Between Condo and Homeowners Insurance?
Many people dream of being a homeowner, but at the same time not all of these individuals have the desire to deal with the associated costs and maintenance that comes with homeownership, so they choose to purchase a condo. Having a condo is a great alternative to renting an apartment or owning a single family home. Just like with owning a home, you need to have proper insurance. Most people will assume that because you own a condo, it is the same as owning a home so you don’t need different insurance, when in fact you do.
When you own a condo or townhouse, you will more than likely have to pay a monthly Homeowner’s Association (HOA) fee which helps pay for the upkeep of the property of the complex. This fee also doubles as a partial insurance policy. Since most condos and townhouses are individual units within one large building, the HOA fees you pay monthly can be used in case something happens to the building in which you live. Although you might not be fond of paying monthly HOA fees, in the event of something happening to your building, you’ll be glad you did.
How are Condo and Home Insurance Different?
Most would assume homeowners and condo insurance is the same thing, but in fact they are not. The biggest difference between homeowners and condo insurance is that with a home you need to insure the entire house and the property, whereas a condo is only insured for the space that you own. Condo insurance is considered “dwelling coverage” and this is needed just to protect the inside of your unit.
Both homeowners and condo insurance require liability coverage, but how much is needed for each? With a condo, you will not need as much liability coverage compared to a home because there is less space for someone to possibly get hurt. If by chance you have a visitor over and they get hurt in a common area of your condo complex, the HOA insurance will cover this and you will not be held responsible.
As a homeowner however, liability coverage is even more important. Since you have a home with property, there is more space that guests might get hurt. If you happen to have a pool, trampoline, or any playground equipment, you will need more liability coverage. If you are a homeowner with young children who have friends that may come over to play, it would be a smart decision to have extra liability coverage just in case.
Another way that condo and homeowners insurance are different is in the way claims are filed. With single family homes, filing an insurance claim is rather simple (in theory) because it is rather straight forward and is usually made directly to the insurance company. If you are a homeowner and need to make a claim, there is minimal guess work involved. Condos on the other hand are more complicated because you’ll use either your insurance, or the HOA insurance depending on what damage there might be within your unit.
Owning a home or a condo can be a very rewarding and worthwhile investment. The decision to own a home or condo is very significant, and not all people want the same thing. Depending on your lifestyle, if you’d like to keep up with the maintenance and have the time and energy for it, a house may be for you, but if you would rather live somewhere that requires little maintenance, then a condo might be a better fit. Whatever your preference, you need to have adequate insurance coverage to protect your investment.
If you are currently a home or condo owner, contact the professionals at Ion Insurance at 203.729.5261 or go to ioninsurance.com for a quote today!