possibly buying a condo, what’s the difference in home insurance and condo insurance?
December 29, 2009 by
Filed under condo insurance
i am possibly fixing to be buying a condo, but need to find out how much insurance is going to cost me every year. i noticed that there is “condo” insurance as well as home insurance. which one would be better or more appropriate. is condo insurance cheaper? what is the difference in the coverage ?
on a condo the association is responsible for the outside building. this means you insure the inside and each association is different. some cover the building into the inside walls and others will cover more or less. you need to find out EXACTLY what the association covers so you know what you need on your policy. are you responsible to rebuild the walls, insulation, fixtures, etc…if something happens. you should be able to get a copy of their policy or bylaws before buying. you HAVE to write condo policy on the property not homeowners. there is a big difference.
Your condo association purchases insurance on the building and premises. Broadly speaking there are two approaches condo bylaws take to insure the property.
One approach is the condo association agrees to cover only the exterior and common areas. You are responsible to insure the interior this can include walls, wall coverings, flooring, furnace, appliances, lighting, plumbing fixtures, kitchen and bath cabinets (basically everything inside your condo). In this scenario you are responsible not only for your personal property but also the entire interior of your condo. As an insurance agent I did not like this approach because it is very difficult to determine how much insurance you should have to be able to repair or replace everything in within the walls of your condo.
The other approach, which I always preferred, was more comprehensive where the association agrees to cover the entire unit as it was originally built. In this scenario you only insure your upgrades (i.e. bookcases, upgrades, finished basements. etc.) and your personal property.
You need to carefully review your condo bylaws or have a good insurance agent go over the bylaws with you. If you don’t insure the property that you are responsible for you could find yourself woefully under insured and perhaps unable to rebuild your condo.
In addition to insuring the part of the building you are responsible for you need to determine the replacement cost of your personal property within the condo.
Sorry for the long answer but it is a surprisingly complex question.
A condo policy comes with $1,000 of building coverage (which you can increase). A homeowners has enough building coverage to fix the whole building.
That’s the main difference. Condo insurance IS cheaper, because MOST of the building coverage, is the responsibility of the association.
You should be discussing this with your agent.