When homebuyers in San Diego choose between single-family homes or condominium units, their choices are mostly based on factors such as property value and lifestyle preference. Not much attention is given to the insurance aspect.
Although all residential properties need to be insured, the type of coverage and the policy terms can differ between a condo and a single-family residence. Homeowners insurance, also known as HO-3, is the name given to the policies that cover unattached dwellings. Condominium units are protected by HO-6 policies in addition to master policies issued to the homeowners association.
In San Diego, homeowners insurance coverage for residential properties features six sections that serve as the major terms of coverage:
- The dwelling structure
- Unattached structures
- Personal property of the insured
- Total loss
- Personal liability
- Medical payments
The main differences between policies for unattached homes and condo units can be found in the first three sections mentioned above.
The dwelling structure of single-family residence consists of the entire living space, including all permanent features such as kitchen islands, cabinets, breakfast bars, sun decks, and others.
Unattached structures such as guest houses, storage sheds, gazebos, and playgrounds are given HO-3 coverage that usually starts at 10 percent of the dwelling structure value. It is up to the homeowner to increase this coverage limit.
When it comes to the personal property stored within the dwelling structure, HO-3 coverage starts at 50 percent. Just like with unattached structure coverage, this limit can be raised by the homeowner on a nominal basis.
The dwelling structure of a condominium is not covered by individual policies. It is covered by a master policy issued to the homeowners association. The premiums are typically paid from the fees collected by the condominium management group.
Unattached structures in a condominium, if any, would also be covered by the master policy.
The terms of coverage for personal property tend to be more complex in condominium situations. In essence, the coverage provided by master condo policies stops beyond the interior walls of the units. Basic HO-6 policies cover furniture, decorations, and personal items, but this may be insufficient. If the master condo policy does not explicitly cover certain items such as appliances and cabinets, the coverage may need to be increased.
In general, condominium owners in San Diego pay more affordable premiums compared to owners of single-family residences. However, condo owners are also more likely to be inadequately covered in terms of personal property. This situation commonly arises when a mortgage lender requires a minimum policy. If expensive items are stored in a condominium unit, they may be at risk of loss unless the coverage is increased.
In the end, both single-family residence and condo owners should think about the items they store in their homes as well as any home improvements they make since they may need to review their coverage.
To learn more about the different types of home insurance available, reach out to American Tri-Star. In addition to homeowners insurance, we also offer affordable commercial, health, bond, and auto insurance. San Diego residents can rely on American Tri-Star to meet their insurance needs. Call 619-272-2100 today to speak with a friendly agent and receive a free quote.