As lives become more fast-paced and property prices rise, condos are becoming increasingly popular amongst homeowners. Of course, while moving into a new property is an exciting time, ensuring you’re protected against unforeseen circumstances is crucial to making your stay enjoyable. In this case, it’s essential to look into the insurance policy relevant to your property. There are typically two types of policies you can look into for your condo: homeowners insurance and condo insurance. These insurance policies differ based on how much they cover, although they bear many similarities. As a homeowner, you’re responsible for the interior and exterior, and everything, including the inside of your home, garage, and lawn, is included. However, with a condo, you’re only in charge of your unit’s interior and personal property. So, you might be wondering: do I need homeowner’s insurance on a condo? To make a decision, here’s what you need to know:
Understand the Master Policy
Are condo insurance less than homeowners insurance? Usually, yes because of the master policy. Many people get confused when they find out that the association’s master policy covers a condo’s building. This policy is covered under your dues, and these dues include anything that’s classified as a common area, including the hallways, any pools or shared rooms, and the building’s exterior. Unfortunately, what you need to know is that this policy doesn’t cover your unit and, as a condo owner, you’re expected to cover your contents with your insurance. So, your chosen insurance coverage largely depends on the extent that’s covered by this master policy. If, for instance, it’s a bare walls-in policy, only the structural aspects of your condo will be covered. On the other hand, with an all-in policy, the structural aspects, in addition to the light fixture and countertops, will be covered. Understandably, you’ll need more coverage if the master policy is bare walls-in.
Find Out the Association Deductible
It would be best if you found the master policy’s deductible limit. You need to know that when an insurance claim is made through the master policy, all condo residents will be required to bear the cost of the claim’s deductible equally. This is critical information since these deductibles can amount to thousands of dollars. While this cost does spread out when shared amongst a building’s multiple owners, it’s still a cost you need to keep in mind. You can add a deductible assessment coverage rider with your condo insurance that provides you with coverage granting flexibility with the deductible. Furthermore, you need to know your condo association’s bylaws inside out where the deductible is concerned. If the loss starts, for instance, a wire malfunction or a flooding pipe, you can potentially be responsible for the entire deductible in your unit.
Choosing the Right Insurance
Essentially, the answer to condo insurance vs homeowners insurance boils down to what’s already covered and what isn’t. This way, you’ll know what you’re personally responsible for. You need to figure out what your needs are and what situation you’re currently in. In most cases, you won’t need separate homeowners insurance since your landlord will likely have a condo insurance policy that helps rebuild or repair units after accidents, such as a flood or fire. Before making any decisions, you should know what the insurance policy will pay for in case of required repairs when you face any unforeseen circumstances. If you’re stuck at any step, you can always contact a professional like an insurance agent who can evaluate your situation and recommend the best way forward according to your needs and limitations.