After years of working hard and saving up, you’re finally ready to invest in your first piece of real estate. And lucky you, there’s a co-op apartment complex for sale. A few weeks into ownership, a water pipe leaks and floods four different units. The water ruins sofas, carpeting, ceiling tiles, flooring, and electrical appliances. It’s not a happy scene.
Of course, you never expected that this would happen. But you did buy yourself co-op insurance just in case. And now you are ready to use it. Co-op insurance covers you from damages caused by unforeseen events. It is a life-saver when things go wrong. Read on to learn more about co-op insurance coverage and some of the best co-op insurance companies to look into.
Best Co-op Insurance Companies
There are many insurance companies in the market today, and for any co-op or condo owner, it might be tough to select the best providers. Below are some of the best co-op insurance companies.
John Lewis Finance
John Lewis is a mainstay in the financial industry, and for the past 150 years, the company has been providing a broad spectrum of financial solutions. John Lewis’ home insurance coverage is divided into three classes; Bronze, Silver, & Gold. From replacing contents, accidental loss, and alternative accommodation, the provider guarantees full-fledged protection.
Direct Line
Direct Line Group was founded in 2007, and for over a decade, it has grown as one of the top-rated insurance providers. Direct Line’s home insurance ranges from the basic level, Home Insurance Plus, and Select Premier coverage. Pros of getting coverage from the company include its attractive combined content and building coverage that reduces insurance costs.
M&S Bank
M&S Bank launched in 2012 and, since then, has provided financial solutions to both local and international clientele. With its premier and standard home insurance coverage, the company extends protection that covers almost everything. From accidental damage, visitor’s belongings, and student’s possessions, M&S goes above and beyond to protect customers.
Does GEICO Offer Co-Op Insurance?
GEICO is one of the best insurance companies around, and since 1936, it has been giving customers policy coverage to protect their precious property. The GEICO Insurance Agency is prepared to offer co-op insurance policies to owners looking to cover risks that may arise. To learn more about GEICO’s coverage, contact the company to get a free co-op insurance quote.
What Is Co-op Insurance?
Co-op Insurance, also known as Cooperative Insurance, is insurance coverage that provides property-casualty coverage to co-op apartment or condo owners. Co-op insurance mainly covers loss to the individual unit and the building, receiving coverage under homeowners insurance.
Is Condo Insurance the Same as Co-op Insurance?
When insurers talk about condo and co-op insurance, it’s easy to get confused by all the rhetoric. Insurance companies label condo or co-op insurance differently, but this coverage refers to the same thing. The only difference is that a condo is owned while the insuree leases the co-op.
Co-op vs. Condo
To understand the difference between condos (condominiums) and co-ops (housing cooperatives), consider ownership. When a person purchases a condo unit, they own it privately but share common areas with others units. These common areas include elevators, hallways, garages, or pools.
On the other hand, a co-op owner is an individual with a share or interest in the entire building. So, the co-op owner leases the unit, making the corporation the owner of the common areas, interiors, and exteriors.
Why Might You Need Co-Op Insurance?
Co-op insurance is important since you might experience significant problems that make your condo or co-op unlivable. For example, if there is fire or gas leakage, your insurance policy will offer a reprieve. Loss of use coverage in co-op insurance guarantees that you can find temporary housing until things get back to normal.
Do You Need Condo or Co-Op Insurance?
Condo and co-op owners need to have their own insurance coverage beyond those secured by the property owners. Often, new owners assume that since homeowners are already insured, they are also protected under their coverage. This type of thinking is dangerous since you might incur losses in case of damages or unfortunate events. If you purchase a condo or lease a co-op, you need to consider your insurance options as soon as possible to avoid making losses after filing claims.
What Kind of Insurance Does a Co-Op Need?
Property insurance is the most common co-op insurance. It covers individual units and common areas of a building. Since co-op owners pool their resources with neighbors, they can easily acquire a more extensive property insurance policy. The bigger the number of co-op owners, the easier it is to bargain for competitive costs.
Insurance Policies You Need For a Condo or Co-Op
When you are an owner of a condo or co-op, the insurance policies you need are your own insurance policy and the master policy.
Your insurance policy protects you directly by covering your belongings from damage or theft and repairs that you might incur over time.
The master policy covers any damages to the common areas and the liabilities of the association. For instance, if there’s water damage to the common areas, the corporation can claim compensation by citing the building’s master policy.
How Much Does Co-op Insurance Cost?
The cost for co-op insurance varies from one provider to the next, but estimates show that basic options range between 145 and 290 USD per year. Insurance companies often elaborate on the additional coverage that they would provide under certain circumstances.
One insurer might inform you that they will cover liability claims under 72,000 USD, contents up to 18,000 USD, and your walls and floors to 14,500 USD. Each plan will vary depending on your items, year of residence, etc.
What Does an Individual Co-op Insurance Policy Cover?
The Co-op insurance policy covers whatever is inside your unit, including your belongings and visitors. Co-op policies essentially protect unit owners from any potential threat to their stay in the property. Specifically, the co-op insurance covers contents (personal property in the house), walls and floors, and personal liability. To determine the coverage, the insurer conducts a valuation before you receive the final quote.
What Co-op Insurance Doesn’t Cover
Different insurance companies provide various levels of protection for co-op insurance. Some co-op insurance policies won’t include personal losses resulting from theft, loss of use damage to your property, and injuries occurring in your unit. For example, if smoke damages your ceilings, a co-op insurance policy won’t cover it unless it was specified before.
If I Sublet my Residence as Airbnb, am I Still Covered by my Co-op Insurance?
Sometimes, you might prefer to use your apartment part-time and rent it out at other times. If you plan to lease your apartment for six months or more, you are still covered if you inform your insurance provider beforehand. There are usually additional coverage costs involved, but the difference is minimal compared to your usual coverage.
Note that you render your coverage void if you choose to lease to short-term renters (less than six months). If you turn your co-op or condo into an Airbnb, you might not be protected if you experience a loss.
Choosing Between a Condo and a Co-op
The list below breaks down the most vital aspects to compare condos and co-ops.
Do You Want to Own Your Property?
Choosing a condo means that you are an owner who enjoys interests even in common areas like the lawns. But if you go for a co-op, you are just purchasing shares that give you rights to a part of the building. With a co-op, you will have to get approval from a board that votes you into the property. Also, when it’s time to sell, the board has a say too.
How Much are You Willing to Spend?
In most places, condos usually cost more than co-ops. Luckily, you can move into a condo with a 10% down payment against the purchase price. The initial costs for co-ops are lower than condos, but maintenance fees are also higher.
What Fees are You Comfortable Paying?
In fees charged, condos attract lesser fees on a monthly or yearly basis. The maintenance fees for condos take care of routine maintenance and day-to-day aspects like snow removal and gardening. Co-ops charge higher fees than condos because the corporation takes charge of the internal and exterior aspects of the building, such as utilities or pool maintenance.
How Do You Want to Pay Taxes?
Condos are owned privately, and you will be taxed individually. Co-ops are taxed as a single property making the charges split among all the owners. Since property taxes for co-ops are low compared to condos, they are usually added to the maintenance fees.
Do You Need a Tax Deduction?
Property, real estate, or mortgage interests are considered a deductible when filing taxes for condos and co-ops.
Homeowners Insurance vs. Co-op Insurance
When a property is involved, insurers break down coverage based on the parts owned by the insuree. Most people get confused by the distinction between co-op and homeowner’s insurance, especially when they learn that they are also considered collective owners as co-op owners.
Differences Between Co-op Insurance and Homeowners Insurance
Owners of co-ops own whatever is in their individual unit, but this doesn’t make them owners since they lease the co-op units. Co-op insurance is different from homeowners insurance since co-op owners are not responsible for the entire building. This means that co-op insurance covers people that live within a building, excluding common areas. Things like elevators, laundry rooms, walls, floors, and even the roof are covered by the co-op master insurance policy.
The homeowner’s insurance policy covers everything owned by the “owner,” including the fence, garage, and home appliances within the home since the owner is responsible for them. To remember the difference between co-op and homeowners insurance, ask yourself, “What do I own?” “What am I responsible for?” If you lack ownership and responsibility, the homeowner’s insurance policy is not for you.
Final Thoughts
Finding the best co-op insurance company to represent you can be daunting. Take your time exploring potential companies and their various policies to find one that best fits your needs.
