Buying Insurance

Lesson 3: Homeowners and Renters Insurance

Renters and Condominium Owners Insurance

Renters insurance is similar to homeowners insurance except there is obviously no insurance on the dwelling since that is owned by someone else. Renters insurance will be Broad Form not Special. Similar to homeowners insurance, renters insurance provides protection for contents and liability, including injury and damage to the property of others. Many renters overlook this insurance because they feel their situation is "temporary" and because they believe their furniture and belongings are of relatively little value and not worth insuring. If that is your opinion you may want to price some new furniture and applicances. However, even if you are correct, you still face the liability issues. After all, when the visitor to your apartment slips and falls breaking his hip on the new rug you failed to secure, you can't blame the landlord. (Buyer beware:if you are a renter, you need renters insurance).

Condominium owners insurance is similar to renters but with a few additions. In a typical condominium association unit, you essentially own everything from the drywall in. Consequently condominium owners insurance provides for contents and liability insurance. However, the insurance also contains provisions for meshing with the insurance carried by the condominium association for the structure and common risks of all of the unit owners. In other words there are "common areas" and "common property" i.e. swimming pools, playgrounds and the like, in which you as a unit owner have a common interest. If a claim should arise regarding these common elements you could find yourself assessed for your share of an uninsured loss to this collectively owned property. The Loss Assessment endorsement to your condominium insurance would reimburse you for such a charge. As with homeowners insurance, the personal injury endorsement and liability umbrella insurance are also available to condominium owners. More information on condominium and townhome owners insurance is provided in Hungelmann, Chapter 8.

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