Difference between Renters and Condo Owbers Insurance

Whether you own a condominium or rent an apartment, living in a multi-tenancy building brings with it new and unique insurance requirements. Insurance is there for when bad things happen, and when bad things happen in a tenancy building, either co-op or rentals, they usually cascade into other units. Fires and water damages will spread throughout the building, and the structural damages would be covered by basic condo or renter’s insurance. Being held liable for the ruination of other people’s units and belongings could be extremely expensive without insurance coverage.

Basically, the difference between renter’s insurance and condo insurance is that condo insurance is an added policy to supplement the condo owner association’s master insurance policy. This master policy, which is a requirement of buying a condo, covers structural damages only, and does not cover contents or belongings. Renters have no master insurance policy, so structural damages must be covered under their insurance policy, to supplement their landlord’s insurance. Renter’s insurance covers loss of belongings on top of liability coverage, and is much less expensive than condo insurance.

The renter’s insurance policy is basically the same as the condo association’s master insurance, with the added property (belongings) insurance. Renter’s insurance will be much less expensive, however, as secondary structural damages are not covered.

Many different optional coverages are available for condo owners, especially if all that they currently have is coverage under their condominium association’s master insurance policy, which is common to all condo owners. This insurance, though usually good enough to get that bank’s final approval for the mortgage, will probably not cover anything inside of your unit. Condo owners need to have additional insurance coverage to have their belongings covered for loss or damage. When the unit above has water pipe problems, and your unit is damaged, the condo owner’s policy will most likely offer no coverage beyond structural repair.

Renter’s insurance is much the same as condo owner’s insurance, except that there would not be any secondary unit damage coverages, as there would be under a condo association’s master insurance policy. For renters, there is no master policy, so in order to have any insurance coverage, the tenants must attain a personal insurance policy on their unit and belongings. These policies can be as inexpensive as $15 per month, for replacement cost coverage and full liability.

Whether the insurance policy is for renters or condo owners, the tenants should keep records of all of their belongings, for proof when filing a claim. A video recording of all belongings is usually acceptable, but should be approved prior to signing the policy, if receipts are not available (or have been lost in the fire). For electronics and appliances, make sure that the model number is shown, and is readable in the pictures.

If personal belongings within the unit, whether a rental or a condo, are old and not in very good shape, then getting replacement cost insurance coverage might be a waste of money. The deductible cost could very well be higher than the value of the belongings, or very close to that amount. With good belongings in very good condition, replacement cost coverage should be taken in the insurance policy, so that the exact same models are replaced.