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 master policy covers the building's structure, exterior, roof and shared spaces like hallways, elevators and the gym. Coverage extent varies based on the policy type, bare walls, single entity or all-in, which determines how much of your unit's interior you need to insure.

• 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 helps you understand what your belongings are worth and avoid being underinsured. The amount you need depends on your lifestyle and location.

A condo owner in a small studio needs less coverage than a homeowner with a three-bedroom house. If you live in a high-theft city or a coastal area prone to hurricanes, 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.

Loss of use limits are typically set at a percentage of your dwelling coverage, usually around 20%, though this varies by insurer.

Lenders or associations sometimes set insurance requirements. Homeowners need to meet mortgage lender requirements, while condo owners must follow their association's master policy rules.

Condo insurance costs less than homeowners insurance because you're insuring less property. A condo policy protects 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 means more area to insure and higher rebuilding costs. Location risks like storms, theft or wildfires, your coverage amount and your claims history also affect premiums for both condos and homes. 

The bigger the property and the more you're responsible for, the higher your insurance cost.

Whether you own a condo or a house, you need the right amount of coverage, not too little and not more than necessary. MoneyGeek offers these 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.