Is a condo policy the same as a homeowners policy?

A condo policy is a form of homeowners policy, but the coverage for damage to the building is handled somewhat differently. Because the condo association usually owns the condo building itself, the association also insures it. As an individual condo unit owner, you need to maintain homeowners policies only for the portion of your unit that is not covered by the association’s policy.

This will generally include all of the things inside the unit that are for your sole use and not used by anyone else in the condo building. A condo policy differs somewhat in this regard from a renters policy, as the renters policy only insures personal property. Your condo policy still insures some portions of the building, such as the your interior walls and built-in furnishings like appliances and cabinetry. These are items that, while permanently affixed to the building, are considered your personal property and not the property of the condo association.

A condo policy will also contain coverage for personal property, additional living expenses, and liability for damage or injury to third parties. The liability coverage is designed to work in conjunction with the association’s liability insurance, which only covers common area liability. In some situations, the condo association’s policy may not fully cover a claim, either due to lack of insurance or insufficient insurance purchased by the association.

If this occurs, you and the other condo unit owners may be assessed a portion of the uncovered claim, which can represent a significant financial impact. Your condo policy may contain a provision for “loss assessments,” which will pay for these assessments on your behalf.

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