Is a House Cheaper to Insure Than a Condo?

There are several factors that come into play when you compare condo to homeowner’s insurance, including residence value, location, and size.
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When you are looking to purchase a new place to call your own, one decision many home buyers need to make is whether to purchase a house or a condominium.
One factor that may help you make the final call is the differences in the cost of homeowner or condo insurance.
In this three-part article, you’ll find out whether a house or a condo is cheaper to insure. Part 1 talks about what factors impact insurance costs, Part 2 goes over the differences between condo and homeowner’s insurance, and Part 3 answers the big question of whether a house or a condo is more expensive to insure.

Part 1 of 3: What impacts insurance costs

There are few items that can impact your home insurance costs, and may end up being more for a condo or a home. Some of these include:
Overall value of the residence. A home’s insurance rate is going to be based on the coverage needed, which is partly determined by the overall value of the residence.
  • Location of the residence
  • Size of the residence
  • Amenities, such as a pool
  • Age of the residence and roof
  • Bundled policy or other discounts
  • Deductibles

Part 2 of 3: Insurance differences: Condo vs. Homeowner

Condo insurance differs from full homeowners insurance because it simply covers the inside of your unit, not the building in its entirety. Problems that may occur to the building would be covered by a Homeowner’s Association (HOA).
When you first purchase your condo, be sure to check over the condo complex’s insurance, as some have verbiage that actually covers the interior of your home, as well. Note, some policies do require you to insure any upgrades on your unit.
Insurance for a house will not only need to cover the interior of the building, but the exterior (including the roof) and any other buildings on the property as well, such as a detached garage, shed, or workshop. When you own a home, you own everything that is on your property.

Part 3 of 3: Cost of Condo vs. House Insurance

The average cost to insure a condo ranges from about $100 to $400 per year, depending on certain factors noted above.
The National Association of Insurance Commissioners states that the average cost to insure a house ranges from about $574 to $2,005 in 2014.
Doing the math, the average cost of homeowner’s insurance to be $1,132, while the average cost of condo insurance is $250 – or even no cost should it be covered by your condo complex’s insurance policy. The final result: unless you are comparing the cost to insure a penthouse condo in Manhattan to a small one-room home in Oregon, a condo is typically cheaper than insuring a home.
If you were considering insurance costs as a make or break part of your house-buying decision making process, you can feel confident in your knowledge on the cost to insure either. And remember, the quality of your insurance including your deductibles can make a big difference in your final cost, especially should you need to use your insurance coverage.

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