Difference between Condo (or Townhome) Insurance & Homeowners Insurance
Although there are great similarities between buying a house, a townhouse or a condo, there also some key differences. In the case of a townhouse or condo, a Homeowners Association exists for the purpose of governing the property common to all unit owners. The building structure and common areas are usually insured by a Master Policy protecting physical property from covered perils and also providing Commercial General Liability coverage collectively to the association.
Townhome and condo owners are responsible for purchasing ‘Walls-In’ coverage or more commonly known as a Form HO6 (Condo Owners Policy); this individually purchased policy form provides coverage for the interior of the residential unit, protection for the personal belongings of the unit owner, as well as personal liability coverage.
On the other hand, insuring a Single Family Home is much different; the homeowner would simply purchase a Homeowners Insurance Policy (Form HO3) providing all necessary coverage on one form except the perils of Earthquake and Flood which are usually available on a separate policy form.
On a condo policy, you would only need enough dwelling coverage to reconstruct the interior of the unit following a loss; this is why the policy is commonly called ‘Wall-In’ coverage. Damage to the exterior of the building would fall under the responsibility of the Homeowners Association and would be referred to the HOA Master Policy for coverage.
This section of coverage is rather similar whether on a homeowners insurance policy or a condo owners insurance policy; if visitors are injured or if you accidentally injure an individual away from home, or if you negligently cause damage to someone else’s property, you may be covered.
Personal Property Coverage
Personal belongings are insured the same way on a Condo Insurance Policy as they are on a Homeowners Insurance Policy. You will need enough coverage to replace your belongings in the event of a total loss. It is important to note that sub limits exist for valuable items such as jewelry, silverware and furs.
Understanding your Coverage
It is essential to understand the risks involved and the insurance policy which you need to protect your interests! Whether you live in the East or the West, start your FREE Home Insurance Quote today for a simple online experience!