Condominium Owner’s Insurance sounds simple enough, but it also a bit complex. Because condo units typically butt up against other units, condominium owner’s insurance policies must take these shared walls into account. And in the case of multi-story condominium buildings, Condominium Owner’s Insurance must also take into account the abutting floors and ceilings.

So where does one condominium owner’s insurance policy end and the next condominium owner’s insurance policy begin? In simple terms, Condominium Owner’s Insurance coverage begins with the studs. Everything from the wall/floor/ceiling studs inward is covered by that condo owner’s insurance policy. And everything from the wall/floor/ceiling studs outward into the next condo unit is covered by the neighboring condominium owner’s insurance policy.

The structure outside of the condo units’ studs, meaning the building itself, is covered by the Condo Association’s insurance policy. Much like Renter’s Insurance, Condominium Owner’s Insurance covers the interior of the unit. However, unlike Renter’s Insurance, where only personal belongings are insured, Condominium Owner’s Insurance covers such things as cabinets and bathroom fixtures, since these are in reality the property of the condominium owner.

This article by Hometown Insurance Agency further explains the differences between Renter’s Insurance and Condominium Owner’s Insurance. For details regarding Massachusetts policies and coverages, contact TJ Woods Insurance Agency in Worcester.

Understanding the Difference Between Renter’s and Condominium Owner’s Insurance

Although renter’s insurance and condominium owner’s insurance policies have many similarities, they are indeed two very different policies. Both policies provide personal property and liability coverages, but a condominium owner’s policy is a little more complex in the coverage that it provides. The most obvious difference between them is that a renter’s policy does not have coverage for the building or structure while a condominium owner’s policy provides coverage for the interior structure of the owned unit.

Renter’s Insurance

A renter’s insurance policy provides coverage for a tenant who resides in a dwelling or apartment that they rent or lease from another party or entity. Since the tenant does not own the building, a policy that covers their own personal belongings and certain liability exposures is sufficient.

The tenant selects an amount of insurance that is relative to the value of the personal property contained within the unit. Some optional coverages on a renter’s insurance policy might include replacement cost coverage for contents, sewer and drain backup as an added peril, and coverage for scheduled items such as jewelry, collectibles and fine arts.

Condominium Owners Insurance

A condominium owner’s insurance policy provides coverage for the owner of the individual condo unit or townhouse. They own the interior of the unit, and therefore need coverage for the portion of the unit they are responsible for insuring, as well as personal property and liability protection.

The condominium association master policy covers the outer walls and structure, roof, and all common areas, including hallways, banquet rooms, clubhouse and pool. Typically, the unit owner is responsible for insuring the walls and partitions within their own unit, including paint and wall coverings, trim, flooring, and all fixtures contained within the unit, as well as their personal property.

Condominium owner’s insurance also provides some unique features such as loss assessment coverage to cover costs assessed by the association following a loss that exceeds the amount of coverage or for which there is no coverage, or for the deductible following a claim. For instance, the association selected a $25,000 deductible on their policy and the roof of each and every structure is damaged in a hail or wind storm.  Each unit owner would be assessed a portion of the deductible so the roof could be repaired.  Most condominium owner’s policies include a limited amount of loss assessment coverage with the option to increase the limit.

Common Coverages

The two policies are also similar in many ways as some of the coverages are exactly the same.

1. Personal Property in an amount specified by the insured, to cover contents of the unit including furniture, clothing, appliances, toys, and electronics.
2. Personal Liability to cover liability losses in the event a third party is injured on the premises and seeks compensation for their injury. Legal expenses incurred to defend an ensuing lawsuit would also be included in this coverage.
3. Medical Payments to cover medical expenses incurred by a party injured on the premises.
4. Loss of Use to cover additional expenses incurred by the insured when temporary residence is needed following a covered loss to the unit.

As you can see, there are many similarities between Renter’s Insurance and Condominium Owner’s Insurance. At first glance both insurances seem more similar than not. However, by the nature of what is owned and what is shared in a condo, Condominium Owner’s Insurance has to be different by default.

A renter can fully expect liability stemming from the building itself to be covered by the homeowner’s insurance policy, whereas a condo owner is also part owner of the overall condominium building itself and is therefore subject to the Condo Association’s insurance policy as well.

If an exterior roof leak damages the condo unit below it, the condominium owner’s insurance policy will not cover the damage. Because the damage began outside of the unit’s studs, the Condo Association’s insurance would be expected to cover the damages.

Homeowner’s versus renter’s versus condominium owner’s insurance policies all are designed to cover particular things. All have their pros and cons in particular instances and are rarely one of the considerations when deciding what type of dwelling to live in.

To determine your own insurance needs in Massachusetts, contact the insurance agents at TJ Woods Insurance Agency in Worcester, MA. We’re highly experienced in homeowner’s, renter’s and condominium owner’s insurances. We’re happy to also discuss your other insurance needs including personal, business and life.