What Do Homeowners, Condo, And Renters Insurance Policies Usually Cover?

By Staff writer State Farm™ Employee

Everybody has to live somewhere, right? And whether you choose to live in a home, condo, or apartment, you’ll want to protect your home and property with a residential insurance policy. Here’s what you need to know about insuring your home, no matter where you choose to make it.

Insured Hazards

Residential coverage insures your dwelling and/or personal property against common causes of damage and loss, such as theft, vandalism, fire, lightning, ice, wind, and plumbing malfunctions, among others. However, some hazards will not be covered, including floods, earthquakes, and hazards that affect the land itself but not the building, such as contamination. When considering residential insurance, ask your agent which perils are included in the basic policy, and which may require separate or additional coverage.

Homeowners Insurance

A homeowners policy is typically the most comprehensive form of residential insurance because it covers a house’s exterior and interior, as well other structures on the property, such as a garage. The policy will also cover residents’ personal property, including clothes, furniture, electronic equipment, and other household items. (Additional coverage may be needed for especially valuable items.)

Before buyers finalize a mortgage, lenders usually require that they purchase a homeowners policy, so if you’re in the market for a house contact an agent to start the process. If you already own a home but have no insurance, the National Association of Insurance Commissioners reports that the average cost to insure a single-family home is about $800 per year. That’s peace of mind for an affordable price.

Condo Insurance

Like homeowners insurance, condo insurance is usually required by lenders as a condition of the mortgage. However, the cooperative nature of a condominium adds a few twists to a traditional homeowners policy. Usually the building’s exterior, common spaces, and some unit structural elements will be covered under the condo association’s master policy. The cost of this insurance will be included in the dues paid to the condominium association.

The coverage needed for your particular unit will vary depending on the master policy. Most likely, you will be responsible for buying a unit policy that insures most of the interior elements – including additions, renovations, and improvements – as well as your personal property. Review condominium association documents, like by-laws or covenants, for information on the insurance requirements for unit owners. You can also purchase additional coverage for special assessments against unit owners to pay for repairs to common property or other expenses.

Renters Insurance

When you rent an apartment, your landlord is usually responsible for insuring the building’s physical structure, both inside and out.

As a renter, you alone are responsible for insuring your personal property against theft, damage, and loss. And unlike homeowners and condo insurance, renters insurance is not usually required as a condition of occupancy. That means the decision to carry renters insurance is up to you. It’s an easy decision to make, though. The average renters insurance policy costs around $12 a month, making it an affordable option for almost any budget.

Loss Of Use And Liability

A residential insurance policy will also typically include coverage for loss of use and liability. Loss of use means that living expenses in excess of your normal daily budget are covered if you temporarily have to live elsewhere because your home was made uninhabitable by an insured event, such as a storm or fire. This may include hotel costs, meals, and other expenses.

Liability insurance covers settlements and claims against you for physical injury to others for which you are responsible, as well as damage you cause to others’ property. This protection is an important part of your financial security.

Summary Of Typical Coverages

The following table summarizes what coverages are typically included in homeowners, condo, and renters insurance.

Policy Type

Structure

Personal Property

Loss Of Use

Personal Liability

Home Yes Yes Yes Yes
Condo Varies Yes Varies Yes
Renter No Yes Yes Yes

Article courtesy of State Farm Learning Centre

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