Homeowners Insurance vs. Condo Insurance: What’s the Difference?

Owning a home or condo is a major investment that allows you to begin earning equity that bolsters your financial standing. However, there are also concerns about home ownership that could impact your finances. House fires, burglaries, and other catastrophes pose a risk to your financial status if you don’t have the funds available to cover the losses and repairs. Understanding how condo and homeowners insurance may differ allows you to make the best choices for your financial security.

Know the Main Difference between Condo & Homeowners Insurance

When you buy homeowners insurance, it typically covers the entire house. This is because single-family homes are individual buildings that are impacted by potential catastrophes. For instance, a tree falling on your roof will impact you directly as a homeowner. Meanwhile, damage to the exterior portion of a condo will impact multiple units. For this reason, condo insurance usually covers the interior of your individual living space. However, there’s also special insurance you’ll want to make sure your condo association covers.

Understand How Condo Association Insurance Policies Work

When you purchase a condo, you typically pay special fees that go toward collective expenses. One area where these fees are used is to purchase condo association insurance policies that reduce everyone’s financial responsibilities in the event of an unforeseen issue. Usually, these policies cover damage that occurs to the exterior parts of the building along with shared common areas such as community pools. You can do your part to keep the association’s insurance costs low by reporting safety and maintenance issues to the appropriate authorities.

Consider Adding Loss Assessment Coverage

In most cases, the condo association insurance policy will cover all of the damage. But there are some times when a condo association may require owners to pay out of their pockets for special assessments they issue to pay for extra expenses. Depending on the severity of the damage, condo association assessments can reach into the thousands of dollars. Since many people aren’t financially prepared to handle large sums of assessments, it helps to have loss assessment coverage. Adding this type of coverage to your condo owner’s policy makes it easier to manage unexpected assessments and fees.

Know What Your Policy Covers

Most condo insurance policies cover property damage to the individual unit, especially the parts that are inside. You should also have liability coverage for personal injuries that might occur while someone is inside your unit. The personal property coverage you include in your policy should also be enough to help you replace or repair the belongings you keep inside your condo. If you aren’t sure of what your policy covers, it’s best to talk to your insurance agent about your needs. Sometimes, both homeowners and condo owners have special circumstances that could impact the types of coverage they need. For instance, operating a home business or having expensive personal belongings could require additional insurance coverage.

Whether you own a home or a condo, make sure to buy your insurance from a trustworthy, experienced provider. For reliable, affordable home insurance, San Diego homeowners know they can trust Altra Insurance Services. We also provide renters, commercial, motorcycle, and auto insurance. Chula Vista San Diego residents can receive a free quote by calling one of our friendly agents today.