Condo vs. Homeowners Insurance

Posted on: Mar 17, 2025 | 3 mins | Written by: HDFC ERGO Team

Condo vs. Homeowners Insurance

Protecting your home is one of the most important things to do, considering the considerable investment that you make. Whether it is a spacious house or a cosy condo, getting insurance can be of great help in protecting the house. The type of insurance you should get often depends on the property.

A condo insurance and home insurance may seem to be the same thing. However, it is essential to know that there's a significant difference between the two. Choosing the right type of insurance is crucial to safeguard your property and its contents.

What is Homeowners Insurance?

Home insurance is meant for people living in their own houses. They own the property. Home insurance usually offers comprehensive coverage against disasters like theft, natural calamity and fire. However, for natural calamities, home insurance provides exceptions against floods, earthquakes, and others.

Depending on your preferences, home insurance coverage can vary significantly from basic to comprehensive. Therefore, it is essential to understand the difference between what is covered and what is not. Different types of insurance policy providers have other types of coverage. Therefore, you can choose one accordingly.

Typical homeowners insurance covers the following things:

1. Structure of the home: The insurance will cover the entire structure of the house such as the roof, walls, in-built appliances and more.

2. Personal property: If the owner has any personal property within the house like furniture, electronics and other belongings, they will be covered by the insurance.

3. Extra living expenses: If the house ever becomes challenging to live in, the insurance will play an essential role in offering extra living expenses. Therefore, if you plan to live in any nearby destination, the costs will be covered.

4. Liability: Insurance coverage will help with legal and medical expenses in case of injury or property damage to someone else.

What is Condo Insurance?

Condos insurance is designed for people living in a condominium unit. Since it is unit-based, there's a concept of shared ownership for the condo structure. Therefore, it won't cover the entire condo. There's a condo association master policy through which you can gain significant advantages. The master policy covers the common areas and exterior of the building.

The typical condo insurance covers the following:

1. Interior of the unit: Since a condominium is a shared space, only the interiors of the property are covered. Therefore, it will include the walls, roofs and ceilings.

2. Personal property: All the personal property within the condo will be significantly protected. This is to ensure that the owner's unit is in complete safety.

3. Loss Assessment: This is one of the most unique features of condominium insurance. If there's a special loss covered, it will be highlighted. The policy providers will assess for the covered loss and then provide a solution accordingly.

4. Liability: If a third party’s property has been damaged due to your action, the policy will help cover medical and legal expenses.

Balancing the Condo and Home Insurance Costs

Before applying for homeowners insurance for your property, it is essential to know the difference in cost between the two. This plays a vital role in budgeting to protect your property. However, you must know that different factors affect condo and home insurance costs, such as:

1. Base Premium

A condo is a smaller space. Therefore, the premium for condos insurance is usually lower. Moreover, condos are shared space, which is also a significant reason for cheaper premiums. On the other hand, the premium of your house will be decided depending on the size. Usually, the home insurance premiums are higher because they're a single-owned property and on a larger space.

2. Location and Risks

The location and the risks associated with it often increase the premium cost. This is valid for both condo and home insurance. If the property is located in a theft-prone, flood-prone or earthquake-prone area, the risk is eventually higher. Therefore, the premium price will increase. It is advisable to look into the crime rates and weather patterns of the surrounding areas so as to make the right choice.

3. Deductibles and Coverage Limits

Whenever you're applying for property insurance, a major thing you must know is that the higher the deductibles, the lower the insurance premium will be. However, if you are opting for lower deductibles, you must know that during the claim settlement process, you will have to make some out-of-pocket expenses. On the other hand, the coverage limits will also affect the premiums. If you have a lower coverage limit, the price will be lower. On the other hand, if the coverage limit is high and you have opted for some additional coverage, the price will be higher.

4. Personal Property Protection

The property insurance for your condo or home will vary. As for the protection for the property, in this case, it will be the same whether you're a homeowner or condo owner. Personal property protection is provided against theft and significant damages. As a homeowner, it is essential to be familiar with these rules.

In the case of a condo, you must understand what your HOA offers. Condo owners should also make themselves familiar with the rules of the HOA and the master policy that it has. It can help you get a brief idea about the coverage. The master policy of the condo usually covers most of the damages, offering an additional layer of security.

Similarly, the homeowners living in HOA communities can also understand their rights and regulations. You may check if there's a master policy. The master policy usually covers the exterior and surroundings of the house. However, in this case, you may have to pay slightly more because you completely own the property. Homeowners who rent out their properties should opt for extra coverage. This has more benefits than the standard policy, offering extra benefits.

What is the Cost of Home Insurance and Condo Insurance?

Condo insurance is usually cheaper than home insurance. However, if you own the specific properties, it is advisable to get homeowners insurance and secure the property. This will play an essential role in ensuring that the belongings are safe.

The cost is also going to vary depending on the coverage around. The square footage, building and location will have a considerable impact. Homes are also very much prone to structural damage, which is why the expenses are higher. On the other hand, for condominiums, the price is going to be lower because of the shared space and availability of a master property.

When you're renting either of these properties, it is advisable to check for the availability of this insurance. If the owners do not provide the insurance benefits, you can go ahead and get one on your own. Since short-term insurance is available, you can get significant benefits without having to worry about extensive damages. Renters may apply for insurance depending on the period of their stay at the property.

Conclusion

Both home insurance and condo insurance have their own benefits to offer. However, you should compare the two and choose the one that suits you, depending on the property you're staying in. Being reasonable can play an essential role in making the right choice and ensure that you get significant benefits, especially for your property and financial perks.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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