Whether you own your condo or you rent, condo owners insurance or a condo rental insurance policy is a must. Experience a cold snap and the pipes burst? Don’t count on your landlord to spring for your new Alienware laptop or to replace that sheepskin rug Mom gave you. We’ll walk you through the difference between condo owners policies and condo renters insurance and what is protected — and not.
What’s the difference between renters insurance and condo insurance?
It’s pretty straightforward: If you rent your condo, you need renters insurance. If you own your condo, you need a condo policy.
Renters insurance is used to protect your personal belongings in a rental from property damage and theft, and liability protection if someone is injured in your rental unit. Renters insurance includes numerous other benefits including loss-of-use, which is reimbursement in case you’re displaced from your rental.
Renters insurance is not legally required in any state, but your landlord can require you to purchase a policy. Your landlord is required to carry insurance on the property, but it only insures the structure. All contents inside your rental are covered by your own renters policy.
A condo insurance policy includes dwelling coverage and renters insurance does not. Your condo association’s master policy covers the structure of the building.
What does renters insurance cover?
Renters insurance provides protection with four major components:
- Personal belongings: Your policy covers your personal belongings not built in to your rental. Coverage is extended due to specific peril events, such as fire or water damage, or theft. This also includes your personal belongings off-premises too, such as items in a storage unit.
- Liability: Liability covers your cost to defend yourself in and out of court if you cause bodily injury or damage to someone else’s property. This coverage extends to damage or harm from your kids or pets too.
- Medical payments: If someone is injured inside your rental, or you, a family member or a pet cause injury, then medical payments are covered for the victim. And because medical payments in a rental policy are no-fault, the medical bills are submitted directly to the insurance company.
- Loss-of-use: If your rental is damaged due to a covered event and you are forced out of your space, your loss-of-use provides reimbursement for a portion of your living expenses. This includes hotel stays, temporary housing, meals and other living expenses.
Renters insurance goes beyond these main areas and provides other benefits. For instance, you can choose Replacement Cost versus Actual Cash Value for your belongings. This means if you are willing to pay extra on your premium, your personal belongings are replaced at what it costs to replace them with new items, and not the depreciated value.
If you have high-value items, usually an item over $ 1,500, you can add separate coverage. This is particularly important for items such as jewelry, art, antiques or similar items.
[Read: Renters Insurance for College Students]What does condo insurance cover?
Condo insurance provides similar protection as a renters policy. A standard policy would include the same major components:
- Personal belongings
- Liability
- Medical payments
- Loss-of-use
Your condo insurance should cover whatever is not included in your condo association’s master policy.
Since you own your condo, you need dwelling coverage, and a condo insurance plan provides this. As a condo owner, you own everything from the walls inward. So if there is damage to your walls due to a covered peril event, your dwelling coverage kicks in.
Loss assessment is another unique coverage to a condo policy and you can add this to your policy. This provides additional protection for any costs associated with damage caused to the condo, including with the building, the shared areas within the condo complex or an injury in the shared areas, that the condo association is passing onto all individual unit owners.
You should note that it’s important to review your condo association’s master policy thoroughly because you could obtain a condo policy to fill in the gaps of your master policy, and your limits might not be as high. It all depends on how comprehensive the master policy is.
[Read: What is Loss Assessment Coverage?]Best discounts for your renters or condo insurance
The good news is, there are several ways to save on your renters or condo insurance. One of the most effective tactics is to use as many discounts as possible. Working with an agent is one of the best ways to confirm you’re getting every possible discount, since there are some you may not be aware of. A few popular discount options include:
- Bundling: If you already have an auto insurance policy, a renters or condo policy should be inexpensive to add on with a bundling discount.
- Pay in full: Many carriers give you a break if you pay your premiums — usually six months or a year — all at once.
- Safety discounts: If you have an alarm system, deadbolt and smoke detectors in your rental or condo, your carrier may provide you with a discount.
- Paperless: If you go paperless and receive your statements electronically, several carriers reward you with savings on your premiums.
How to pick the right insurance
To pick the right policy, comparison shopping is the first step. Compare quotes and policy details side by side. Many carriers offer this option online for added convenience. Look for details on coverage limits and rates and make sure you’re comparing apples to apples among the policies.
Plus, look at the number of discounts available in case one carrier provides more than another.
Above and beyond price, customer service is important. You want your carrier to make it easy should you need to file a claim. You’ll find this out by reading the reviews and checking out the customer service ratings among the companies.
Lastly, if you need additional coverage for high-value items or other special items, look for a policy that fits your unique coverage needs.
Choosing the right condo insurance or renters policy takes a little research. But you’re rewarded for your efforts by getting competitive pricing and a comprehensive policy.
[Read: Does Renters Insurance Cover Storage Units?]Too long, didn’t read?
If you rent your space, you need renters insurance, whereas a condo policy is needed if you own your condo. Although coverages are similar, the condo insurance provides additional dwelling coverage that is not needed if you are renting. It’s beneficial to compare carriers and policies, and review customer ratings, discounts and other factors to get the best policy for your situation.
We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.
In response to the Covid-19 pandemic, many insurance companies provided relief in the form of percentages back on monthly bills as well as a freeze on coverage cancellations due to inability to pay. While it’s not recommended, you could technically stop your coverage to save money if absolutely needed — but again, it’s strongly advised against.
See below for more details on how you can benefit from the recently approved economic relief act:
Who can benefit from this?
To qualify for rental assistance under the CARES Act at least one household family member must qualify for unemployment or have a significant income lost due to the pandemic. Income must fall at or below 80% of your county’s average income. You must also be a risk of homelessness.
Who’s getting how much?
If families fall below 50% of the average income they’ll be given priority for rent relief funds. Families can get up to a year of rent covered, and three months in the future with the CARES Act rent relief assistance.
How to apply
If you need to apply for assistance, the way you do that will vary depending on where you live. If your city or town has an existing rental assistance program, you’ll likely use that to apply for new aid.
You can contact your local housing authority, nonprofit groups or reach out to your local representatives to find out where and how to apply. Your landlord may also be able to apply for you — but they’ll have to get your approval and signature before doing so.
