What’s the difference between condo and homeowners insurance?
The main difference between homeowners insurance and condo or co-op insurance is how much property you’re responsible for covering.
When you own a house, you’re responsible for everything on your property — the home’s structure, the land on which it sits, and everything inside the home — which means you’re on the hook for any property damage or injuries that occur on the premises. But when you own a condo, you’re only responsible for your individual unit and your belongings inside.
| Condo insurance | Homeowners insurance | |
|---|---|---|
| How dwelling coverage differs | Responsible for interior of condo unit | Responsible for entire structure of home |
| How other structures coverage differs | Not included in condo insurance | Responsible for additional structures on your property |
| How personal property coverage differs | Responsible for insuring personal belongings inside and outside of condo unit | Responsible for insuring personal belongings inside and outside of home |
| How loss of use coverage differs | Coverage limit is 50% of Coverage C (personal property) limit | Coverage limit is 30% of Coverage A (dwelling coverage) limit |
| What you’re covered against | 16 named perils for both interior of condo and personal property | Open perils for home’s structure, 16 named perils for personal property |
| Average cost in 2023 | $506 per year | $1,754 per year |
Condo insurance (HO-6) and home insurance (HO-3) coverage differences, explained
Homeowners insurance and condo insurance are virtually identical policies — both protect your home and your belongings from damage or burglary. The main difference is the amount of coverage you need.
Dwelling coverage
This provides coverage for the structure of your house or condo unit. Your dwelling coverage limit should be based on the property’s replacement cost. A property’s square footage, number of rooms, and interior fixtures (cabinets, countertops, etc) all contribute to its replacement cost.
When you own a condo or co-op, the dwelling coverage limit in your personal condo or co-op insurance policy should be based on what your association’s master policy does or doesn’t already cover.
To give you a better idea of how much dwelling coverage you need, you’ll need to figure out if the association’s commercial policy provides structural coverage for interior units. There are three main master policies: bare walls, single entity, and all-in coverage.
- Bare walls coverage: Only covers the building’s structure (like the roof and siding), common areas (like the lobby or pool area) and injuries that occur in shared spaces. Structural coverage does not extend to the interior of condo units.
- Single entity coverage: Covers the building’s structure, common areas, and injuries that occur in shared spaces, plus coverage for the interior of your condo, like floors, walls, ceilings, fixtures, and cabinetry. It does not cover unit alterations or improvements.
- All-in coverage: Covers the building’s structure, common areas, and injuries that occur in shared spaces, coverage for the interior of your condo, plus coverage for alterations or improvements
Personal property coverage
Both homeowners and condo insurance protect your personal property from covered damages and theft. Regardless of how broad your association’s master policy may be, it generally never covers the personal belongings inside your condo unit.
Liability coverage
Liability coverage protects you against financial loss if you’re sued for bodily injury or property damage. If you own a house, you’re generally exposed to more liability risk since you’re responsible for any accidental injuries that occur on your property. When you own a condo, you’re only responsible for accidents that occur in your individual condo unit. If a building visitor were to get injured in the condo building’s weight room or pool area, the financial responsibility would fall on the condo association, not the unit owners.
Loss assessment coverage
This is a policy add-on that covers losses assessed to condo or homeowners association members after a damage or loss to a building common area. Coverage only applies when the cause of loss is covered by your personal condo or home insurance policy. So if you’re issued a loss assessment for flood damage to the building lobby, you wouldn’t be covered for your portion of the loss.
