There are several different types of homeowners insurance policies, each based on the type of dwelling you live in. Renters and condo insurance are two that cause a great deal of confusion in terms of what is covered and what is not.
Exploring Renters Insurance
When you purchase renters insurance, you do so because you do not own the dwelling. You have no insurable interest in the building itself, whether it’s a home, duplex, or unit in an apartment complex. Your landlord should have a dwelling policy to cover the building itself and your renters policy will cover your belongings and personal liability.
The main parts of a renters insurance policy include:
Exploring Condo Insurance
Condo insurance can be more complicated. While you do not own the building, grounds, or common areas, you have more to worry about in terms of damage to the building. The main difference is that condo owners are responsible for everything from the “studs in.” In other words, your condo association is responsible for the actual building but you are responsible for the drywall, finishing touches (like paint), flooring, and permanent fixtures. You are also responsible for any additional fixtures or add-ons you add once you make the purchase (like extra lighting or major kitchen appliances).
You do have some insurable interest in the building itself, of course. The association fees you pay help to pay for the insurance the association purchases to cover the building and common areas itself.
Another major difference is the loss assessment coverage you might have added to your condo policy. Say, for example, the entire roof of the building is damaged in a storm. Your association’s insurance policy has a huge deductible, so a portion of the deductible is assessed to each condo owner. Your policy will include a small amount of loss assessment coverage to help pay for your portion of the costs. This is a number you can increase, if you choose.
Aside from those two main differences, condo owners also have personal property, loss of use, personal liability, and medical payments coverage just as renters do.
Make sure you’re clear on the type of policy you need when you move into your new location. If you’re renting and own nothing but your own belongings, you need renter’s insurance. If you’ve purchased a condo, you need condo insurance.