why is a condominium complex considered a higher risk than an apartment?

Question

the two are of a similar building structure, and other than ownership, i'm not aware of any difference between the two, but why is a condominium considered a higher risk than an apartment?

Answer 1

Well, there isn't as much CONTROL over the individual units in a condo, because they're owned by each of the owners. As you're probably aware, owners REGULARLY break the bylaws, and it's almost impossible to throw them out - all you can do is fine them.

With an apartment, it's easier to throw a tenant out.

Having said that, there isn't much risk difference - habitational buildings are ALL pretty high risk.

Answer 2

I have never seen a case where a company charges more for their Condo Unit Owner's policy than they do their Tenant's Package policy. Condos are usually owner occupied. Owners tend to take better care of the place where they live than do tenant's or landlords. Condo buildings are built to a very high standard in order to get top dollar selling price. The Condo association tends to take better care of the premises, and there is no concern that the owner's are not checking up on the property. Apartment buildings are built as economically as possible, however condo buildings are usually built with the latest techiques and technology. Unless a particular company has had an unusually poor loss experience in that line of business, there's no reason why a condo policy would be more expensive than a tenant's policy based on similar coverages.

Answer 3

You sound like you are assuming that a condo is a higher risk. Thats sort of vague. It would seem that a building occupied by people who actually own the property is a lesser risk than people who are simply renting with no financial interest. There are exposures from a legal liability standpoint to the condo board and they need liability to cover that. The remaining risks in my opinion are less with a condo than an apartment.

Answer 4

The contract between condo association and the owner of the condo have separate responsibilites than that of an apartment complex. The association transfers or shares to the condo owner liabilities, upkeeps, maintenance of pools, street care & lighting, groundskeeping, clubhouse costs, and so-forth to the condo owners. The condo owner also has responsibilities for the inside walls, ceilings, floors, fixtures, cabinets, and other things based on the contract or agreement. When you compare these things to an apartment complex, they are totally different. Hope this helps.