What’s the Difference between Condo and Homeowners Insurance?

If you own a condominium, your insurance needs will be different from someone who owns a house. You don’t need homeowner’s insurance, but rather insurance specifically designed for condos. That’s because as a condo owner, you only own your unit, which is part of a larger structure or complex. Through your association dues, you and the other condo owners share ownership in the overall building and responsibility for the upkeep and maintenance of common areas. Part of the money each of you pays to the association goes to pay for insurance coverage for these common structures and areas. However, and here’s the important part, that coverage does not protect any of your personal property within the walls of your unit or your liability should someone be injured in your condo.

California condo insurance typically covers your appliances, furniture, wall décor, kitchen and bathroom amenities, your personal possessions and the walls within your own home. Upgrades you’ve made to your place are also covered, such as plush carpet, wood floors, built-in wall units, lighting or ceiling fans. Be sure you have adequate coverage (limit) for those permanently attached items which are your responsibility to insure.  These may be interior walls and attached appliances and cabinetry.

To protect yourself, it is essential that you keep a current inventory of your possessions. The easiest way to do this is to periodically walk through your condo with a video camera. Make sure you store your inventory or video tape in a secure place such as a safe deposit box.

Before you sign up for coverage, you’ll need to check with your association or read through the covenants to see what is and what is not covered.  Ask your agent/representative about “loss assessment coverage” and if the limit provided by your policy is adequate.

You don’t want to fall prey to the common misconception that the insurance that covers your overall building will also cover everything you own. Remember it this way, your association covenants typically cover everything from your wall studs out. The condo insurance you buy will be called upon to cover everything from the wall studs in. And, condominium insurance is usually less expensive than home insurance.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.

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