Condo Insurance vs. Homeowners Insurance

The main difference between condo and home insurance is that condo insurance covers the interior of your individual unit (though exact coverage depends on your condo association's master policy type), while homeowners insurance protects the entire house structure. Additionally, condo owners share responsibility for common areas through their condo association, whereas homeowners are solely responsible for their entire property.

The table below highlights the main differences between condo and homeowners insurance by coverage type.

Dwelling coverage is what pays to rebuild your home after a covered loss, such as a fire. 

In home insurance, the amount of dwelling coverage you need should be high enough to rebuild your house from the ground up if it’s destroyed. This is based not on market value but on the replacement cost, which reflects building materials, labor, square footage, number of rooms and special features such as custom finishes or detached structures.

In condo insurance, your dwelling coverage limit should reflect the cost to repair or replace the interior parts of your unit, such as flooring, fixtures and built-in appliances. The exact amount depends on what your condo association’s master policy does or doesn’t cover, so it’s important to review those details when setting your own coverage.

When you own a condo, two types of insurance work together to protect your property: your personal condo insurance (HO-6 policy) and your condo association’s master policy.

The association’s policy, also known as the “master policy,” generally covers the building’s structure, exterior, roof and shared spaces like hallways, elevators or the gym. The extent of this coverage can vary depending on whether the policy is “bare walls,” “single entity,” or “all-in,” which determines how much of your unit’s interior you’re responsible for insuring.

• Bare Walls: Covers only the building’s structure and common areas. Owners are responsible for insuring everything inside their unit, including fixtures, appliances and interior finishes.
• Single Entity: Covers the building structure, common areas and original fixtures inside each unit (like cabinets or sinks). Owners still need insurance for personal belongings and any upgrades or renovations.
• All-In (or All-Inclusive): Offers the broadest coverage, including the building structure, common areas and most interior fixtures and finishes in each unit. Owners mainly need coverage for personal belongings and improvements beyond the original finishes.

Personal property coverage works the same way for both condo and homeowners insurance; it protects the things you own, like furniture, electronics, clothing and appliances, if they’re damaged or stolen. Whether you live in a house or a condo, the protection follows your belongings outside your home, such as while traveling.

When deciding how much personal property coverage to get, estimate the value of everything you own. A home inventory can help you understand the value of your most important items and avoid being underinsured. But the amount you need may vary depending on your lifestyle and location.

For example, a condo owner in a small studio may only need modest coverage for fewer belongings, while a homeowner with a three-bedroom house will likely need higher limits. Someone living in a high-theft city or a coastal area prone to hurricanes might also consider extra coverage to address those risks.

Personal liability coverage works similarly in both condo and homeowners insurance, as it protects you if you’re found legally responsible for injuries or property damage to others. This could include a guest slipping inside your home or accidentally causing damage to a neighbor’s property.

When deciding how much liability coverage to carry, consider your overall risk exposure. Both condo owners and homeowners should think about factors like whether they frequently host guests, own pets, or have features like pools that increase accident risks.

Loss of use coverage, otherwise known as additional living expenses, works the same for both condo and home insurance, covering the extra costs of living elsewhere when your home is uninhabitable after a covered event. This includes hotel stays, rental costs, meals and other extra expenses incurred as a result of not living at home.

The limits for loss of use are often set at a percentage of your dwelling coverage, often around 20%, but this depends on your insurer.

Sometimes, insurance may be set by lenders or associations. Homeowners usually need to meet mortgage lender requirements, while condo owners must follow their association’s master policy rules.

While both policies cover many of the same things, condo insurance costs are usually lower than homeowners insurance because you’re insuring less property. A condo policy generally only needs to protect the inside of your unit and your belongings, while the condo association’s master policy covers the exterior and shared areas.

Homeowners are responsible for the entire property, including the house and any detached structures, which adds more area to insure and higher rebuilding costs. Premiums for condos and homes can also be influenced by location risks (storms, theft, or wildfires), the amount of coverage you choose, and your personal claims history. In short, the bigger the property and the more you’re personally responsible, the higher the insurance cost will likely be.

Whether you own a condo or a house, it’s important to have the right amount of coverage — not too little and not more than you need. Here are a few MoneyGeek tips to help you find that balance:

One of the most confusing parts of condo insurance is figuring out where your coverage stops and the condo association’s master policy begins. Without careful planning, you could end up paying for coverage you don’t actually need, or worse, leaving gaps that put you at risk.

Condo insurance and homeowners insurance both include coverage for personal property, liability and loss of use, but they differ in how much of the property they protect. Home insurance covers the entire house and any detached structures, while condo insurance only covers the inside of your unit. Condo association master policies provide coverage for shared areas, so knowing where their responsibility ends is important.

It’s easy to get confused about how home and condo insurance differ. MoneyGeek’s FAQs break down the key points to help you understand them better.