If you’ve just bought a condo (congratulations!), you may have started looking around for the right home insurance to protect your investment. Home insurance isn’t what you’re after though. What you need is condo insurance.
So, what’s the difference you might ask? In this article, you’ll find out what the difference between condo insurance and home insurance is so that you can navigate the insurance options available in Canada and select the option that’s best for you, your belongings, and your condo.
Condo Insurance vs. Home Insurance
The difference between condo and home insurance is who each is intended for. Simply put, condo insurance is intended for individuals who own a unit within a larger managed property, while home insurance is designed for owners of a standalone residential property.
Condo insurance is considered a form of home insurance, but it’s distinct from traditional home insurance, and here’s why.
Think of high-rise condo buildings, low-rise condo buildings, and townhouses. In properties like these, the main structure and any common spaces usually fall under the protection of the condo corporation’s master insurance policy. Thus, things like dwelling coverage, a standard feature of home insurance policies in Canada that covers the exterior structure of a building, don’t apply. Consequently, they are excluded and insurers focus on providing coverage for things that you actually need as a condo owner, such as:
- The interior structure and fixtures within your condo unit (ex. Walls, flooring, cabinets)
- Upgrades and improvements you make to your condo unit (ex. Kitchen renovation, new bathroom fixtures, etc.)
- Personal belongings (ex. furniture, clothing, electronics, etc.)
- Liability protection for bodily injury or property damage you cause others
- Additional living expenses in case your condo is deemed uninhabitable due to a covered peril, such as a fire (ex. Hotels, food, etc.)
- Damage to common areas that aren’t covered by your condo corporation’s building insurance
Home insurance, on the other hand, is tailored for owners of standalone houses or dwellings, such as single-family homes. It covers both you and your property, including the land your home sits on and any external structures on your property. Unlike condos, which are managed by condo corporations and partially covered by master insurance policies, homeowners rely solely on home insurance to protect their properties, inside and out. As such, the following types of coverage are included in most home insurance policies, with many optional types of coverage to choose from should you want more comprehensive protection against life’s uncertainties.
- The primary structure of your home (ex. The foundation, walls, roof, etc.)
- Any external structures on your property (ex. garages, sheds, fences, etc.)
- Personal belongings (ex. furniture, clothing, electronics, etc.)
- Liability protection for bodily injury or property damage you cause others
- Additional living expenses in case your condo is deemed uninhabitable due to a covered peril, such as a fire (ex. Hotels, food, etc.)
To illustrate the difference between home and condo insurance, let’s say a storm sweeps through town, hurling debris and inflicting damage on nearby homes and condo buildings. In this situation, condo owners would find solace in knowing that their building’s insurance would address any damages inflicted on the exterior structure of the property. Meanwhile, a homeowner would rely on their home insurance policy to help them cover the costs associated with repairing the damage caused to their home by the storm.
Next Steps: Tips for Buying Home or Condo Insurance
Now that you know whether you’re looking for home or condo insurance, you’re likely ready to start shopping around. When you do, keep the following tips in mind. Doing so will get you one step closer to getting your home and condo protected for the best possible price.
Don’t Ignore Your Deductible
A deductible is the dollar amount you have to pay upfront before your insurance covers the rest when making a claim. Oftentimes, a higher deductible leads to lower monthly premiums, which is why many people choose higher deductibles. However, beware of going with a deductible you realistically can’t afford or which will hurt you financially. Many people have an “it won’t happen to me” attitude when it comes to insurance coverage, but you don’t want the unthinkable to occur and then, on top of the stress of a break-in or an accident, be faced with an impossibly high deductible.
Opt For Replacement Value Compensation
Cash value compensation means that you’ll be compensated for damaged, lost, or stolen items at the original value at the time of purchase. While replacement value compensation means you’ll receive the value of the item at the price it would cost to buy it today. So even if you bought your laptop for $800 back in 2019, you could receive $1,200 if that’s what it costs today if it was damaged or stolen as a result of a covered peril. For this reason, replacement value compensation is usually a better deal.
Get Sufficient Coverage
Some policies may only offer “bare walls” coverage, which means that only damage to the condo’s walls, ceilings, and floors will be covered. This doesn’t include furniture, cabinetry, lighting fixtures, and other construction details in your unit. So make sure you’re accurately assessing the value of your belongings, including high-value items like electronics and jewelry, and consider any additional coverage you might need. For instance, do you live in an old building that requires repairs? Is your area a known earthquake or wildfire area? These are all things you need to consider to ensure you’re getting sufficient coverage.
Shop Around
Always compare quotes from different providers before settling on a policy. Remember that different providers will have different rates for different types of coverage. They also might offer discounts for first-time customers, or give you a special rate if you purchase multiple policies from them. You’ll never know unless you see what’s out there. Fortunately, YouSet makes it easy to compare various providers and prices in one place. With just a few simple questions, you’ll receive a list of options that fit your criteria and match your budget. And once you find your perfect policy, you can purchase it right there on our site. No unnecessary phone calls or paperwork needed.