by Diane Quinn

Created on: September 11, 2009   Last Updated: February 20, 2011

If you are in a situation where you move from a house into a purchased condo or become a renter, you should ask yourself: What is the difference between renter's and condo owner's insurance? Each type of home requires a different type of insurance, that in some instances, do share similar protection coverage.

> Renter's Insurance

A renter's insurance policy covers only the belongings of the renter. The building insurance is paid for by the owner of the building. Be aware that unless you purchase your own renter's insurance policy, you risk losing everything you own because the building owner's property insurance does not cover tenant belongings.

Renter's insurance also provides coverage should your apartment become inhabitable. If you include this coverage in your policy, it will pay for other lodging for a specified period of time. Accidents happen every day. Should one happen in your apartment caused by your negligence, a renter's insurance policy can also help with attorney fees and possible medical costs should you be responsible for any damage inside your apartment or in the case of injury.

> Condo Insurance

Purchasing a condo unit involves other insurance considerations in addition to standard property replacement and liability protections. You should be aware that there are definite restrictions and rules and regulations that must be honored.

When you made your purchase, you instantly became a member of a master condo association. The association will have its own insurance policy on all of the buildings up to and including the inside of all the walls, plumbing and electrical wires. A portion of your monthly association dues go toward payment of the master insurance policy.

Your association bylaws will dictate exactly where their ownership ends and where yours begins. When you know how yours is defined, either as "bare walls in" or "all in," then you can proceed to research a comprehensive condo owner's insurance policy.

The most common policy is "bare walls in" defined as all real property from the exterior framing inward. This does not include fixtures or installations within a condo like counter-tops, bathroom and kitchen fixtures or flooring. Your personal condo owner's insurance should include these features, especially if you have made investment upgrades inside of your unit.

An "all in" policy includes fixtures, installations or additions within the interior surfaces of the perimeter walls, floors and ceilings of individual units. This type of insurance will be more limited and less expensive.

There are also variations within each of these two types of condo policies. Researching the governing documents of your association will either prevent you from purchasing unnecessary insurance coverage, or will assist you in making sure that you have sufficient coverage.

Carefully evaluate what items should be included in the type of policy you need, whether it be renter's or condo owner's insurance. Then contact a certified insurance agent who can customize a specific policy for you and your budget.

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