Condo vs Homeowners Insurance

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Are you the proud owner of a condominium unit or a soon-to-be one?

Whether you’re a new homeowner or are still considering purchasing a condo, understanding the applicable insurance policies is crucial in protecting your investment. There are many policies out there, but most people are particularly confused between two types: homeowner’s insurance and condo insurance.

This page breaks down the key distinctions between condominium insurance and homeowner’s insurance, helping you make an informed decision that best suits your needs.

Homeowner’s Insurance

Before we learn the key differences between condo insurance vs. homeowners insurance, let us first get acquainted with both of them. Let’s start with homeowner’s insurance.

Homeowner’s insurance, also known as HO3 insurance, is designed for freestanding single-family homes with one to four people living inside. The policy includes the exterior and interiors of the home, as well as other unattached structures that are within the property limits, like gazebos, garages, and sheds.

Homeowner’s insurance also offers liability coverage in case of any third-party injury or damage caused by you or anyone living with you. Lastly, it may also include personal property coverage for belongings like appliances and furniture.

Condo Insurance

Condominium insurance is a policy specifically designed for owners of a condo unit. 

The main difference is that this policy doesn’t cover shared spaces and the physical structure of your condominium building. These are covered instead by your condo’s Home Owner’s Association (HOA) master plan, which covers damages to shared spaces such as parks, pools, and exterior structures of the building. However, it doesn’t cover any of your personal belongings and subsequent structural improvements.

Condo insurance, also known as an HO6, fills these gaps. It covers damages to your unit, including damaged or missing personal belongings, loss of use, and even damage to the interior improvements you made to your unit.

HO6 insurance vs. HO3 insurance

Condo insurance and homeowner’s insurance share some similarities, particularly because they both protect your precious home. 

However, there are key differences between HO6 insurance and HO3 insurance that you should keep in mind, such as the following:

Property Coverage

Condo insurance covers your personal belongings and any structural improvements you’ve made within your unit. In contrast, homeowner’s insurance provides coverage for both your home and your personal property, including detached structures on the property.

Additional Fees

Homeowner’s insurance typically covers everything a homeowner would need, which means that you wouldn’t need to pay anything more than the premium each month.

On the other hand, condo insurance only covers your personal properties, but you will typically need to pay association fees to cover the shared spaces in your building.

Condo Insurance vs. Homeowner’s Insurance Pricing

Now for the important question: is condo insurance cheaper than home insurance?

The answer is yes, it is. Since homeowner’s insurance covers a broader range, it has a more expensive monthly premium than condo insurance. According to Forbes, the average insurance premium for a $350,000 dwelling is $1,582 per year.On the other hand, condo insurance has a relatively lesser monthly premium since it doesn’t need to cover shared spaces. The National Association of Insurance Commissioners estimates that the average annual premium for condo insurance to be at $511.

Protect Your Home With the Right Policy

Choosing the right insurance policy is essential for protecting your investment, whether you own a condominium or a single-family home.

Picking the right policy for your unique needs can be a bit difficult, but here at Magnum Insurance, you can get bespoke insurance policies that specifically cover your every need.

By securing the best coverage, you can have peace of mind, knowing that your property, personal belongings, and liability are protected.

Consult with our experienced insurance professionals today to find the perfect insurance solution for you!

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