The standard homeowner’s policy usually covers destruction and damage to the residence’s exterior and interior. It also covers the loss or theft of certain possessions and personal liability for harm to other people. There are essentially three basic levels of coverage that exist. Those provide for a cash value, replacement cost, and an extended replacement cost or value. These policy rates are determined by the insurer’s risk that you will file a claim. This is assessed based on your past claim history, the neighborhood you live in, and the condition of your home.
But did you know that this policy has limited coverage, especially when it comes to condominiums and co-operatives? That’s because there are different risks to condos and co-ops that don’t apply to single-family homeowners. Let’s explore these differences.
Condominium and Co-Operative Insurance
Co-ops and condos have virtually the same type of insurance. The main difference between the two lies in whether they’re owned and managed the right way. Differences between these types of insurance policies can be explored further by exploring the three parts of property insurance, which are dwelling coverage, personal property coverage, and liability coverage. The main difference between the coverage that protects condos and co-ops, and that which protects a homeowner lies in what parts of the structure you own.
When one owns a house, they own everything inside the house, its structure, and the land upon which the house sits. Owning a condo or having shares in their co-op means that you’re only responsible for the space that’s within their walls. Everything else, such as the hallways and the common areas, is covered by a collective homeowner’s association insurance policy. There are three main areas of property insurance, namely dwelling coverage, personal property coverage, and liability coverage.
Co-op and condo policies cover structures that are located outside the home. Dwelling coverage covers a home insurance policy that protects your physical home, such as the walls, the roof, ceilings, floors, and more. It also covers external structures like sheds, pools, fences, and garages. Homeowners are responsible for the physical structure on top of the land that their home was built on. Co-op and condo owners don’t have that responsibility. Your condo or co-op complex can have a fence and a pool, but it will just be the condo/co-op association’s insurance that would cover damages in those areas. These dwelling coverages are enough to cover damage that can happen inside the home. For example, in case a fire breaks out in your condo and destroys your kitchen, you’d need insurance to pay for those damages.
As a house owner, you have more at risk than someone who owns a condo or a co-op. People can get injured inside your home, as well as outside, such as in the backyard, the pool, etc. The liability coverage of a home property insurance policy would shield you from litigation. That would also help you move away from those who are injured inside your home. Condo and co-op owners don’t have this problem. They’d be covered by the liability insurance of the complex. Therefore, as someone who owns a condo or a co-op unit, you could get away with less liability coverage. Experts would still recommend you have the same amount of liability insurance though.
Does Personal Property Protection Differ?
Yes, there’s a difference. Personal property protection would differ between the three policies. A standard homeowner’s policy would need a larger amount for personal property coverage. It would all depend on the value of your personal property inside your home. Adjust your co-op or other personal property limits by reflecting the true value of your possessions. Your complex’s insurance policy for condo or co-op owners is unlikely to cover any personal possessions. It’s recommended that people make an inventory of their most valuable objects and jot down their value.
Read Your Insurance Policy
Each complex has its insurance policy that will cover damage to common areas such as pools, hallways, and more. These can also extend to your home’s interiors. When you first move into your condo or co-op, you must go through the policy with your insurance agent. Find out what exactly is covered and how it fits into the overall plan. Sometimes the policy will cover your home as it was built originally. You’ll only need to cover the improvements. Go through your policy thoroughly to find out what’s covered, it’ll be easier for you to find out how much condo/co-op insurance you’ll need. Get coverage that overlaps with your association’s policy.
While all this may sound complicated, it can be easy if you work with experts in this domain, like us. We know the ins and outs of homeowner’s insurance for various kinds of dwellings and we’ll make sure that everything is covered. Take a look at your individual property, your building association, and other bylaws or agreements to come up with the perfect customized policy. This would be perfect for you. Ensure you get competitive pricing and add the extra coverage you need. Your solution will be all-encompassing in terms of coverage. That’s the right way to do this.