What's the difference between homeowners insurance and condo/co-op insurance?
Property buyers choosing between single-family homes and condominiums normally look at a laundry list of "to-do" items. Insurance should be high on that list, as protecting any residential property differs depending on what type of home you choose. Thats the case with homeowners or condo/co-op insurance. In fact, there are significant differences between the two property models and types of coverages. Head over to Credible who has partners to give you a free quote. It only takes two minutes. A BEGINNER'S GUIDE TO BUYING HOME INSURANCE  1. Homeowners insurance is a form of property insurance that covers losses and damages to an individual's residence, along with furnishings and other assets in the home. "Homeowners insurance also provides liability coverage for accidents in the home or on the property," said Tyler Forte, chief executive officer at Felix Homes, a Nashville, Tenn.-based real estate services firm. 2. Co-op insurance is a type of property-liability insurance that covers losses and can cover damage for owners of a co-op. "These policies generally cover losses to their building or individual units," Forte said. Another difference between homeowners insurance and insurance for your condo is the structure of the property being purchased. "Homeowners insurance is for properties that the owner lives in and is responsible for the entire structure," said Greg Martin, president of Think Safe Insurance, LLC, in Brandon, Fla. "These are usually covered by specific home insurance policies." Co-op or condo insurance is for condo units or owned units in a building where a portion of the building may be covered by an association or master policy. DOES YOUR HOMEOWNERS INSURANCE COVER EMERGENCIES  "These are usually covered under a specific policy and can be owner-occupied or rental units with specific endorsements," Martin said. "Townhomes can require either type of policy, depending on if the association covers anything, and what type of policy they require owners to carry." Compare home insurance companies and shop for plans in minutes on Credible. How homeowners insurance and co-op insurance differs  The distinctions between homeowners and condo insurance go even deeper. Here are the main differences between the two:  1. Single-owner versus multiple owners: Home insurance is for single-family homes, which is completely different from a co-op insurance policy. "A co-op insurance policy is designed to cover the building, common areas, and sometimes the individual units of a multi-unit building that's owned by the building owners," said Earl Jones, founder of the Earl L. Jones Insurance Agency in Sunnyvale, Calif. "Whereas a homeowners insurance policy is just owned by the homeowner, the co-op insurance is owned by all of the unit owners." 2. Co-op insurance doesnt have to cover as much ground: Another major difference between standard homeowners insurance and co-op insurance is the dwelling coverage. "In most instances the owner of the co-op building will have coverage that takes care of the exterior structure and common areas like hallways," Forte said. "Like homeowners insurance, co-op insurance covers items inside an individual unit, which includes interior walls, fixtures, personal property, and liability exposures." 3. No personal insurance coverage for co-op owners: A co-op may limit liability coverage to just the common areas only, leaving the unit owners responsible for not only their personal liability but also the liability of their guests, pets and children. "Thats not the case with a homeowners insurance policy, which covers the entire home and liability," Jones said. 4. Pricing is different, too: The cost of homeowners insurance and co-op insurance is totally dependent on how much coverage you need. "If you have a $1,000,000 home filled with furniture, expect to pay substantially more than someone that owns a $200,000 co-op thats sparsely furnished," said Lamar Brabham, CEO and founder of Noel Taylor Agency, a financial services firm located in North Myrtle Beach, South Carolina. "On average, however, a co-op policy will run about $475 annually and a homeowners policy will run about $1,500 annually." With different coverage amounts, its important to shop around to find the right home insurance plan that fits your needs. Visit Credible to start the process and maximize the value you gain from your homeowners policy. HOW TO GET THE BEST HOMEOWNERS INSURANCE POLICY FOR YOUR NEEDS  When youre buying a policy  Buying either a homeowners or co-op insurance policy requires some unique features  and that means conducting solid due diligence. 1. For homeowners insurance  When it comes to home insurance, consolidate as much insurance as possible. "In a good majority of the cases, bundling home and auto will give people the best rates," Jones said. 2. For co-op insurance  Study the master co-op insurance policy. "Individual co-op unit owners need to know what's covered on the master co-op policy," Jones said. "Dont assume it includes the interior of the individual units. Often, there's little to no coverage on the master plan to rebuild the interior of their unit in the event of major damage, which forces the unit owner to pay out of pocket." "A deductible of $5,000 is advisable when buying co-op insurance," Jones added. Leverage Credible when youre looking for either homeowners or co-op insurance. With Credible, you can compare insurance price rates from multiple lenders, all in minutes. Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.