A common misconception among condo owners and residential renters is that if the building is insured then they are protected from potential loss. When it comes to insurance, knowledge is power! Knowing what to expect from renters insurance and condo owners insurance is essential. Once you realize that your personal belongings are not covered by the insurance that protects the building, the only thing left for you to decide is whether or not you have anything of value that you would like to be insured against loss.

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Choosing Renters Insurance or Condo Owners Insurance

Renters Insurance

In some places, you are required to provide proof of renters insurance before you can move in. If you are not required to have it, it is still highly recommended, especially in today’s’ economy. If there is damage incurred to your building and your being held responsible, the last thing you want is to have to pay for the damage, as well as replace all your personal belongings. If your renting, your landlord is not responsible for insuring the premises you occupy or any of your possessions. When you purchase it, it will cover all your personal belongings, as well as covering any accidental injury or any property damage that you may incur. If you cause any damage to the building that you live in, you will be held responsible, so if you accidentally start a fire because you left the oven on, you will be held responsible for the damage to your building, as well as any others that are also affected by it. Standard plans should also cover any natural disasters that may strike, depending on the area you live in, as well as protecting against electrical surges, water damage from appliances, damage from falling objects(such as aircraft), vehicles, explosions and even civil commotions. Renters insurance is also fairly cheap, so it’s not a major expense to insure all your belongings in the event something goes wrong.


Condo Owners Insurance

Condominium Insurance is like a Home Owners Policy. It covers all personal property, any improvements you’ve made to the property, and liability in case someone is injured in your house or there is damage. There is also the option to extend your coverage to the trees and shrubs outside your house if you choose. The Condo Association you are under is required to have their own insurance, and that covers the building itself, however, it may not always be sufficient so getting your own coverage is highly recommended if not required. Under some agreements you may also be held responsible for common areas, such as lobbies or hallways, in the event that there is property damage or someone is injured in one of these public spaces. There are two coverage’s that are unique to and can be included in Condominium Insurance, and those are Condominium Contingent Coverage and Loss Assessment Coverage. Condominium Contingent Coverage is for when the Condo Association may not have enough coverage on your condo. If the coverage isn’t sufficient then the unit owner will be responsible for the difference. Condominium Contingent Coverage covers this difference. Loss Assessment Coverage is when there is damage or loss to a collectively owned condo, and more than one owner is expected to to share in the loss. This could occur if the Condo Associations coverage isn’t sufficient to cover the cost, so Loss Assessment Coverage will cover up to a certain amount of your share of the loss.



Getting The Right Insurance Policy

The desired outcome of purchasing an insurance policy is to make you whole financially in situations that would otherwise leave you unprotected. There are a variety of insurance plans designed for many different situations, all carefully created as a safety net to protect the purchaser in case the unthinkable occurs. Condo owner’s insurance and renter’s insurance are similar types of policies, yet should be understood separately in order to know which is the right one to purchase.


Condo owner’s insurance is also known as the HO-6 policy, while the renters insurance policy is known as the HO-4 policy. They both protect the policy holders personal property from a wide range of hazards including fire, theft and smoke. Another similarity, and false assumption regarding these types of policies, is the fact that floods and earthquakes are not covered by these types of insurance. In some cases it is possible to buy a separate policy or rider for these situations, but it is important to know your situation and risk when speaking with your agent. Certain liability situations are also covered by both properties. For example, if an accident occurs within the home, the policy holder may be protected from liability claims that could otherwise be devastating.

renters insurance

Another common question for your agent revolves around the actual act of making you financially whole after a loss has occurred. Will your agent be offering actual cash value for your personal belongings, or will you be restored financially with the replacement cost of your goods? Actual cash value will provide you with compensation relative to what your goods were worth at the time of loss. Replacement cost would provide you with financial compensation in direct correlation with what it would cost to buy the goods new from a store.


Condo owner’s insurance provides additional coverage for replacement of permanent attachments or added fixtures inside the dwelling. This is important because a condo owner tends to consider their residence a long term home and will be likely to make upgrades suited to their lifestyle. On a related note, any structural parts of the building that are owned personally are protected. In addition, it is not uncommon for a condo owner’s association to charge a cost of common property loss if damage to a jointly owned area occurs. In these cases condo owners insurance would protect the policy holder from paying a larger than necessary amount of money out of pocket to their association.


Choosing the right policy is a critical step in protecting you and your belongings from loss, but once you make that choice then you can remain confident in the knowledge that you are protected from the unforeseen.