What is the difference between homeowners insurance and condominium / cooperative insurance?

There are big differences between homeowners insurance and cooperative insurance. (iStock)

Property buyers choosing between single-family homes and condominiums typically look at a laundry list of “to-do” items. Insurance should be at the top of this list, as home ownership protection differs depending on the type of home you choose.

This is the case with homeowners or condominiums / cooperative insurance companies. In fact, there are significant differences between the two real estate models and types of insurance.

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1. Home insurance is a form of property insurance that covers loss and damage to a person’s home, as well as furnishings and other assets in the home.

“Home insurance also provides liability coverage for accidents in the home or on the property,” said Tyler Forte, chief executive officer of Felix Homes, a Nashville, Tennessee-based real estate services company.

2. Cooperative insurance is a type of property liability insurance that covers losses and can cover damage for owners of a cooperative.

“These policies generally cover losses on their buildings or individual units,” said Forte. Another difference between home insurance and condominium insurance is the structure of the property to be purchased.

“Home insurance covers properties where the owner lives and is responsible for the overall structure,” said Greg Martin, president of Think Safe Insurance, LLC, in Brandon, Florida. “These are usually covered by special household insurance.”

Cooperative or condominium insurance applies to condominiums or units in a building where part of the building may be covered by an association or master policy.

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“These are usually covered by a specific policy and can be owned or rented units with specific notices,” said Martin. “Townhouses can ask for either type of policy, depending on whether the association covers something and what type of policy the owners are required to carry.”

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How household insurance and cooperative insurance differ

The differences between homeowner and condominium insurance go even deeper. Here are the main differences between the two:

1. Single owner versus multiple owner: Household contents insurance is intended for single-family houses, which is completely different from cooperative insurance.

“Cooperative insurance is designed to cover the building, public areas, and sometimes individual units of an apartment building owned by the building owners,” said Earl Jones, founder of Earl L. Jones Insurance Agency in Sunnyvale, California. “While household insurance only belongs to the homeowner, cooperative insurance belongs to all homeowners.”

2. The cooperative insurance does not have to cover as much: Another major difference between normal home insurance and cooperative insurance is home protection.

“In most cases, the co-op owner will have a cover to take care of the outdoor structure and common areas such as hallways,” said Forte. “Like home insurance, cooperative insurance covers items within a single unit that includes interior walls, furnishings, personal property, and liability risks.”

3. No personal insurance cover for members of the cooperative: A cooperative can limit liability insurance to the common areas only, so owners are responsible not only for their personal liability, but also for the liability of their guests, pets and children.

“That’s not the case with home insurance, which covers the entire house and liability,” said Jones.

4. The prices are also different: The cost of homeowners insurance and cooperative insurance depends entirely on your insurance needs.

“If you have a $ 1,000,000 home filled with furniture, expect to pay significantly more than someone who owns a sparsely furnished $ 200,000 cooperative,” said Lamar Brabham , CEO and Founder of Noel Taylor Agency, a financial services company based in North Myrtle Strand, South Carolina. “On average, however, a cooperative policy will be about $ 475 a year and a homeowners policy will be about $ 1,500 a year.”

With different levels of coverage, it is important to look around to find the right home insurance that suits your needs. Visit Credible to start the process and maximize the value of your homeowner policy.

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When you buy a policy

Buying home or cooperative insurance requires a few specifics – and that requires solid due diligence.

1. For home insurance

When it comes to home insurance, consolidate as much insurance as possible. “In most cases, the house and car bundling will give people the best prices,” said Jones.

2. For cooperative insurance

Study the Master’s Cooperation Insurance. “Individual co-op unit owners need to know what is in the master co-op policy,” said Jones. “Don’t assume that it includes the inside of each unit. Often times, the master plan for rebuilding the interior of your unit is little to no coverage in the event of major damage, forcing the unit owner to pay out of pocket. ”

“A deductible of $ 5,000 is advisable when purchasing co-operative insurance,” added Jones.

Use Credible if you are looking for home or cooperative insurance. With Credible, you can compare insurance prices from multiple lenders in minutes.

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