Condo insurance vs. homeowners insurance: What’s the difference?

The main difference is how much property you’re financially responsible for protecting. The policies also have a few coverage differences.

Kara McGinleyPat Howard 1600

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Kara McGinley

Kara McGinley

Editor & Licensed Home Insurance Expert

Kara McGinley is an editor and licensed home insurance expert at Policygenius, where she writes about homeowners and renters insurance. As a journalist and as an insurance expert, her work and insights have been featured in Kiplinger, Lifehacker, MSN, WRAL.com, and elsewhere.

&Pat Howard

Pat Howard

Senior Editor & Licensed Home Insurance Expert

Pat Howard is a senior editor and licensed home insurance agent at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.

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The primary difference between condo insurance and homeowners insurance is how much property the policies are designed to cover. 

A condo unit doesn’t need nearly the same amount of structural coverage as that of a single-family home, so coverage is written differently — one to four-family dwellings are insured with HO-3 and HO-5 home insurance policies, while condo and co-op units are insured with HO-6 condo insurance. While there are some similarities between the two policy types, there are also some key differences that we’ll highlight in this guide.

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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 insuranceHomeowners insurance
How dwelling coverage differsResponsible for interior of condo unitResponsible for entire structure of home
How other structures coverage differsNot included in condo insuranceResponsible for additional structures on your property
How personal property coverage differsResponsible for insuring personal belongings inside and outside of condo unitResponsible for insuring personal belongings inside and outside of home
How loss of use coverage differsCoverage limit is 50% of Coverage C (personal property) limitCoverage limit is 30% of Coverage A (dwelling coverage) limit
What you're covered against16 named perils for both interior of condo and personal propertyOpen perils for home's structure, 16 named perils for personal property
Average cost in 2022$506 per year$1,899 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.

Understand what your condo association’s policy covers

When you own a condo, you’re essentially protected by two policies: the condo association’s commercial policy, and your personal condo policy. Also called the “master policy”, the association’s commercial insurance covers the building itself, common areas, personal property belonging to the association, and claims for which the association is legally responsible (like an injury in a building common area). 

The master policy also sometimes extends to the interior of individual units to cover floors, walls, ceilings, and fixtures within each condo unit. In that case, you’d only be responsible for covering unit improvements, alterations, and personal possessions in your unit. Be sure to check what the master policy covers so that you’re not purchasing too much (or too little) coverage for your personal condo or co-op policy. 

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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. 

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Condo insurance vs. homeowners insurance cost

The average cost of homeowners insurance is $1,899 per year, according to our analysis of 2022 home insurance rate data across the country.

Meanwhile, condo insurance costs around $506 per year on average, according to the National Association of Insurance Commissioners (NAIC). [1]  

The cost of insurance is primarily based on the square footage, location, and build of your residence. Since homes are generally bigger and more prone to extensive structural damage, homeowners insurance is generally more expensive than condo insurance.