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The difference between insurance for condo owners vs. renters

Posted in Home & Property Insurance, Personal Insurance Tips

The difference between insurance for condo owners vs. renters

Condo Owner - Property Insurance 

If you are the owner of a condo unit, you require an insurance policy that protects the contents and the physical building. There are different types of condos - high-rise, detached, semi-detatched - so your insurance policy will work in tandem with your Condominium Corporation's insurance policy. You require a Property Insurance policy. This is something your insurance broker will work with you to fully understand. 

As the owner, you are responsible for the "finishings within". That basically means that you need an insurance policy that protects any item that is within your outside walls. Contents, walls, flooring, fixtures, cabinetry ect. all need adequate coverage. 

Since you own the unit, you can make any renovations or changes (in accordance with your condominium corporation's policies) within your unit. In your insurance policy, these are covered under a clause called "Improvements and Betterments". If you are making changes to anything that brings them beyond the unit standard, you need to have the correct limit/valuation for your unit. For example, if you upgrade your unit from carpet to hardwood, that difference is covered under your I&B section. 

If you need a hand understanding the ins and outs of your property insurance policy, check out these tips. 

Condo Owner - Renting the Condo

As the owner of a condo unit that is being rented out, you require similar coverages to the primary residence condo owner outlined above. However, you would likely require less coverage for personal property (contents) ie. you may choose to cover the appliances only, since it is not your personal belongings occupying the unit. Pro Tip: ensure that your tenant has Tenant's Insurance so that their items are protected in case of an insurance claim.   

In this case as well, you would likely require Rental Income protection for the amount that you rent this unit out for. This will help protect you should the property not be livable for a period of time after a claim (thus, no rental income is coming in). 

Condo Renter - Tenant's Insurance 

If you are someone who is renting a condo unit, you are a tenant of that dwelling. That means that you only require an insurance policy that protects your belongings, and not the physical building. This is a Tenant's Insurance Policy. The unit's structures such as walls, appliances, fixtures and floors are are protected under your landlord's (the condo unit owner) property insurance. 

You will work with a broker to set the proper limits (the amount paid out in the event of an insurable claim) for your contents, as well as liability limits. If there was a break in, fire, or flood (even if it does not originate in your unit), your tenants insurance will help pay for replacement items and somewhere to stay until you can return.

Tenant's Insurance has a very low monthly cost (typically around 20-40 dollars), so it is a very affordable way to protect your belongings. 

* Disclaimer - All information provided here is simply a guide. Please speak with your licensed insurance broker to build an insurance policy that meets the needs of you, the unit owner/renter, and the condominium corporation for your unit. 

Do you have the right condo insurance? 

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