What’s the difference between homeowners insurance and condo insurance?

Condo insurance and homeowners insurance serve the same purpose: protecting you and your property against financial loss in the event of property damage, theft, and liability. The key difference is condo insurance only needs to protect what’s inside your unit’s four walls. A homeowners policy covers everything inside and outside.

Why is condo insurance so cheap?

Condo insurance is inexpensive compared to homeowners insurance because policies don’t have as much to cover. A condo insurance policy protects what’s inside your unit. The building’s condo association master policy covers everything else.

What type of homeowners insurance policy is required for a condominium?

As a condo owner, you’ll need an HO-6 insurance policy to cover your unit. This policy is specifically designed for people who own a condominium or co-op unit. HO-6 insurance provides liability coverage, loss of use of coverage, and protects your condo and everything within its four walls.

What’s the difference between HO-6 and homeowners insurance?

The difference between HO-6 and homeowners insurance is the former is meant to protect condominiums specifically. HO-6, also known as condo insurance, covers a condo owner’s unit and personal belongings and protects them against lawsuits. Homeowners insurance, meanwhile, must protect the policyholder’s entire house, attached structures, and outside property including the yard and walkway.

Does HO-6 insurance cover drywall?

Your condo association master insurance policy covers drywall in the event of a covered loss. How much further that protection goes depends on your building’s policy. A “bare-walls” policy typically ends at your drywall, insulation, and studs. “All-in” coverage may extend to your flooring, cabinets, and built-in appliances, though.

Differences Between Condo Insurance vs. Homeowners Insurance

Condo insurance
Key differences
What’s covered
Condo vs. home insurance
Coverage amount
FAQs

Condo insurance
Key differences
What’s covered
Condo vs. home insurance
Coverage amount
FAQs

Your home is likely your most valuable possession, and it’s critical that you protect it with a strong insurance policy. But if you own a condo, you might think you need a homeowners insurance policy. After all, your condo is your home, right?

Actually, you need a condo insurance policy, not homeowners insurance. A condo insurance policy protects your unit’s interior and your personal belongings. The building owner is responsible for the rest of the building or the surrounding outside property.

The right condo insurance policy ensures your home has adequate protection and saves you from buying more insurance coverage than you actually need — which a homeowners insurance policy may give you.

Keep reading to learn the differences between condo insurance and homeowners insurance, how much coverage you need to buy, the various types of condo insurance, and more.

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What is condo insurance?

Condo insurance — also known as HO-6 insurance — is a type of homeowners insurance specifically designed to protect condominium units. It helps pay to repair your condo or replace your personal items in the event of a fire, water damage, theft, vandalism, and more. Your condo insurance policy can also help pay for legal expenses if someone sustains an injury on your property.

Your condo insurance policy only covers what’s within the walls of your condo, though. A condo association’s master policy protects the remaining building structure and common areas such as sitting areas, parking garages, and pools. Part of any condo association fees you pay goes toward your building’s master insurance policy.^[1]

Your condo association may also be responsible for covering your unit’s originally built standard structures. But you’d have to cover any alterations you made to the initial unit structure.

What is a condo association master policy?

You’ve already read how a condo association’s master policy works in principle, but it’s important to note the different types of master policies. Your condo association will likely have one of the following master policy types:

Bare walls-in coverage: This “minimal” condo association master policy protects the condo’s physical structure. That means it covers just the materials needed to construct and maintain the units including the roofing, framing, wiring, exterior framing, and insulation. Bare walls-in coverage doesn’t cover anything inside the unit.^[2]
Single-entity coverage: This policy covers everything bare walls-in coverage does. It also protects some built-in property, such as light fixtures. Only original condo entities are covered under the master policy, though. You’d be financially responsible for any upgrades you make to your condo.
All-in coverage: Condo associations also have the option to go “all in” with their master policy. This coverage protects the previously mentioned materials, as well as any structural elements and fixtures in each unit. You’d have coverage for upgrades or improvements you make as well in most cases. You’ll likely need less individual condo insurance in a building with an all-in condo association master policy because your unit would have coverage. In that case, you’d just need insurance for your personal belongings. Your tenant fees will likely be higher, though, to cover this comprehensive policy.

Key differences between condo insurance and homeowners insurance

Your necessary coverage limit is one of the key differences between condo insurance and home insurance. If you own a condo, you need insurance for your unit and your possessions. Your condo association’s master policy covers the rest of the building and any shared materials and features.

But homeowners insurance, on the other hand, has to cover so much more. It protects the entire property — the physical house, all of the yard and outside areas, as well as personal belongings.

Here’s a closer look at some of the other key differences between condo insurance vs. homeowners insurance.

Condo insurance

Required dwelling coverage is based on the condo association’s master policy (whether it covers just the building’s interior structure or the entire interior).
Liability insurance only covers accidents that happen inside your unit.
Loss assessment coverage helps pay for damage to common areas in your condo building that you’re assessed for.
Condo personal property protection provides coverage in the event a covered loss damages your belongings or they’re stolen.

Homeowners insurance

Dwelling coverage depends on the home’s rebuild value, not the cost to completely rebuild it.
Liability insurance must cover the entire property — inside and outside.
Homeowners loss assessment coverage works similarly to condo loss assessment but only applies if you’re part of a homeowners association (HOA).
Homeowners should also have personal property protection in the event of damage or theft because HOA master policies won’t include it.

Parts of a condo insurance policy

Condo and homeowners insurance provide different types of coverage, but they contain a lot of the same components. A good condo insurance policy will protect your home against various damages as well as your belongings. It will also help pay your legal expenses if you’re in a home-related lawsuit, replace stolen items, and cover travel and living expenses if your condo becomes uninhabitable because of damage.

Like a general home insurance policy, your condo insurance also covers:

Dwelling: This coverage pays to replace the portion of your unit’s structural damage that you’re responsible for.
Liability: This covers legal costs you may incur due to a personal injury or property damage lawsuit.
Personal property: Personal property coverage protects your personal belongings that you have in your condo.

Some condo insurance policies might also include loss of use coverage, which helps pay for travel and other expenses if your condo suffers damage that makes it uninhabitable.

Here’s a deeper look at each of these three key components.

Dwelling coverage

Dwelling coverage protects your individual condo’s structure, the interior walls. The coverage can also extend to other installed features, such as floors, countertops, cabinets, and fixtures. With a condo, you typically just need enough dwelling coverage to fix or rebuild your home’s interior. Any damage outside of your unit (the building, outside walls, elevators, hallways, etc.) is your condo association’s responsibility.

This is where condo dwelling coverage differs from homeowners dwellers insurance. A single-family home would need enough dwelling coverage to pay for damages to the entire structure as well as any attachments (like a garage) and outside land.

Liability coverage

Liability coverage can help pay for legal and medical costs if someone gets hurt in your condo and you’re found responsible. This coverage can also be helpful if you’re found liable for accidentally damaging someone else’s property.

You typically only need liability coverage for incidents that happen in your unit, not in the building’s common areas, as the condo association’s insurance would file a claim in that instance.

Personal property coverage

If a covered loss damages items like your clothes, electronics, or furniture, your personal property coverage pays to repair or replace those items. So, if your condo building caught on fire, the association policy would help pay to repair the building damage, but your individual personal property coverage would cover the cost of your personal items.

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What condo insurance excludes

Condo insurance covers a lot, but it doesn’t cover everything. Be sure to note your condo insurance policy’s exclusions so you know what additional coverage you may have to purchase.

Here are some examples of what condo insurance typically doesn’t cover:

Earthquakes and regional hazards
Flooding
General wear and tear
Exterior building damage
Intentionally injuring someone else
Termite damage

Optional loss assessment coverage

Your condo association’s master policy covers most losses in the building’s covered areas. But if the damage exceeds the policy’s coverage limits, you and your fellow condo owners may have to make up the difference.

Loss assessment coverage helps protect you from paying for these repairs out of pocket. This coverage typically helps pay for medical costs, property damage and liability costs, and can be a good failsafe to ward off any unexpected bills.

Optional earthquake and flood coverage

Condo insurance policies typically don’t include flood or earthquake coverage. You can add these protections to your policy, though.

If you live in an area at high risk for either floods or earthquakes, you may want to consider these coverages. Both earthquake and flood insurance can help pay to repair your home and replace your personal belongings in the event one of these natural disasters occurs.^[3]

Without it, you could be financially responsible for addressing any damages or losses on your own because your individual condo insurance policy won’t help in this scenario.

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Cost of condo insurance vs. homeowners insurance

Insurers use similar factors to determine condo insurance and homeowners insurance premium costs. Insurers will use your home’s location, your condo or home’s value, how much your personal belongings are worth, your claims history, and coverage selection and limits to determine how much you’ll pay for your condo or homeowners coverage.

While the determining factors are similar, the cost of condo insurance versus homeowners insurance can differ greatly. Condo insurance is typically less expensive than homeowners insurance because there’s less property to protect. Your condo insurance policy has to protect your individual unit and your personal belongings. A homeowners policy, meanwhile, must cover a house’s entire structure as well as the outside property.

Here’s a side-by-side comparison of the average annual cost for condo insurance versus homeowners insurance in some well-known metro areas.

Metropolitan Area ▲▼	Average Annual Cost: Condo Insurance ▲▼	Average Annual Cost: Homeowners Insurance ▲▼
New York City, NY	$2,454	$2,992
Los Angeles-Long Beach, CA	$1,880	$2,292
Chicago, IL	$1,974	$2,408
Miami-Hialeah, FL	$13,795	$16,823
Washington, D.C.	$987	$1,203

How much condo insurance do you need?

There’s no exact amount for how much condo insurance, but there’s a formula. Look at your condo insurance policy’s key components and consider how much you’d need to cover each. This includes the cost to repair or replace your condo’s walls, cabinets, floors and various built-in appliances. These components would be covered under the dwelling portion of your condo insurance.

Next, use a similar approach for your personal belongings. Take inventory of your furniture, clothes, electronics, jewelry, etc. How much would it cost to replace them if they were lost or stolen? This total will figure into your personal property protection coverage.

Next, factor in your liability coverage costs. You want to be protected if someone sustains an injury in your condo and files a lawsuit. You’ll also want loss assessment coverage in case a building common area is damaged and the residents are asked to help pay for the repairs.

The total figure you come up with should help limit how much money you have to pay yourself if your home suffers property damage, is burglarized, or someone injures themselves in your unit.

Condo insurance vs. homeowners insurance FAQs

Picking the right condo insurance policy can be tricky — especially when you’re trying to understand how it differs from home insurance at the same time. Here, you can find answers to some of the most commonly asked questions about the differences between condo insurance and homeowners insurance.

What’s the difference between homeowners insurance and condo insurance?
Condo insurance and homeowners insurance serve the same purpose: protecting you and your property against financial loss in the event of property damage, theft, and liability. The key difference is condo insurance only needs to protect what’s inside your unit’s four walls. A homeowners policy covers everything inside and outside.
Why is condo insurance so cheap?
Condo insurance is inexpensive compared to homeowners insurance because policies don’t have as much to cover. A condo insurance policy protects what’s inside your unit. The building’s condo association master policy covers everything else.
What type of homeowners insurance policy is required for a condominium?
As a condo owner, you’ll need an HO-6 insurance policy to cover your unit. This policy is specifically designed for people who own a condominium or co-op unit. HO-6 insurance provides liability coverage, loss of use of coverage, and protects your condo and everything within its four walls.
What’s the difference between HO-6 and homeowners insurance?
The difference between HO-6 and homeowners insurance is the former is meant to protect condominiums specifically. HO-6, also known as condo insurance, covers a condo owner’s unit and personal belongings and protects them against lawsuits. Homeowners insurance, meanwhile, must protect the policyholder’s entire house, attached structures, and outside property including the yard and walkway.
Does HO-6 insurance cover drywall?
Your condo association master insurance policy covers drywall in the event of a covered loss. How much further that protection goes depends on your building’s policy. A “bare-walls” policy typically ends at your drywall, insulation, and studs. “All-in” coverage may extend to your flooring, cabinets, and built-in appliances, though.^[4]

Sources

Insurance Information Institute. "Insuring a co-op or condo."
LoPriore Insurance Agency. "Guide to Condo Master Insurance."
Insurance Information Institute. "Are there any disasters my property insurance won't cover?."
Nationwide. "What does condo association insurance cover?."

Joe DytonInsurance Writer

Joe Dyton has been a professional writer since 1999. He's been writing about the auto insurance industry for 15 years and was an in-house marketing copywriter for GEICO for a decade. Learn more about Joe at joedyton.com.

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Edited byChris SchaferSenior Editor

Chris SchaferSenior Editor

15+ years in content creation
7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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