Condo and homeowners insurance have a lot of similarities, but differ in terms of coverage for the structure of your home.
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If you own a home, you’ll need homeowners insurance to cover the interior and exterior structure of the home, as well as additional structures on the property. But if you own a condo, you’re only responsible for the interior structure of the unit and personal items inside. Your condo or homeowners association (HOA) carries a master policy that insures everything outside of your individual unit, but you’ll need your own condo insurance policy to protect the interior of your unit.
Homeowners insurance protects the entire structure of your home and your personal property
Condo insurance protects the condo unit and personal belongings inside, but not the structure of the condo building
Since condo owners don’t the entire building, they only need enough structural coverage to protect the interior of the unit
Your condo insurance should supplement your HOA’s master policy, which provides some amount of structural coverage for your unit
The primary difference between condo insurance and homeowners insurance is how the policies protect the structure of your home.
If you own a house, you’re responsible for the inside and outside — the home itself, land, and additional structures on the property. Homeowners insurance covers both the inside and outside structure of your home, as well as other structures on the property. If you own a condo, you’re only responsible for your own unit and personal items inside — your HOA’s master policy protects the building itself, common areas, and typically covers the interior structure of your unit. You generally need condo insurance to cover improvements or alterations to the unit, as well as personal belongings inside.
For example, dwelling coverage in a condo owner's policy covers alterations made to the condo unit, but not the walls or building it is located in. In a homeowners insurance policy, dwelling coverage protects the entire interior and exterior structure of the home.
Homeowners insurance and condo insurance have similar coverage, both protect your home and your belongings from damage or burglary. The main difference is how much coverage you’ll need.
When determining how much homeowners insurance dwelling coverage you’ll need, you calculate the rebuild value of your home. With condo insurance coverage, how much you’ll need will depend on your HOA’s master policy. When you’re part of an HOA you pay membership dues and part of those dues go towards HOA insurance, which protects the makeup of your condo, the condo building, and common areas like the lobby and outdoor spaces.
There are three different types of master policies that determine how much dwelling coverage you need: “bare walls”, “single entity”, and “all-in”
Bare walls coverage - Typically only includes coverage for the bare structures of your unit, like the drywall, floors, and ceiling. Does not include coverage for fixtures, cabinetry, or built-in appliances
Single entity coverage - Includes the same coverage as bare walls policy, plus coverage for the interior makeup of your condo, like the fixtures, built-in appliances, countertops, and cabinetry. Typically doesn’t include coverage for altercations that you made, so if you installed your own chandelier, it wouldn’t be covered by your single entity master policy
All-in coverage - Includes all the same coverage as bare walls and single entity, as well as coverage for alterations that you made.
Whether your master policy is all-in, single entity, or bare walls, you’ll need more condo insurance to fill in the coverage gaps. Master policies can vary, so be sure to read your HOA’s bylaws to learn how you’re covered.
It’s important to note that a homeowner can also have HOA insurance if their neighborhood has an HOA. If your neighborhood has an HOA, your HOA insurance would cover common areas like a community pool or shared playground.
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Both homeowners and condo insurance protect your personal property from damage and theft. Your HOA master policy, no matter what type of policy it is, never extends coverage to your personal property.
Liability coverage protects you if you are found liable for bodily injury or property damage. That means if someone gets hurt while in your house, your liability coverage could help pay for legal fees if they decide to sue you. When it comes to condo insurance, your liability coverage only covers accidents that happen in your individual condo unit. Accidents or property damage that occur in common areas of the condo are generally covered by your master policy.
You only need loss assessment coverage if you live in an HOA. It’s an endorsement you can add to your policy that covers any amount you’re assessed for damage or loss to an HOA common area, as long as the cause of loss is covered by your policy. The amount of loss assessment coverage you’ll need depends on your HOA’s bylaws.
Homeowners insurance is more expensive on average than condo insurance, as homes are generally bigger and therefore cost more to insure. Since a condo owner’s HOA master policy protects the condo building and shared spaces, a condo owner won’t need as much dwelling coverage as a homeowner. Condo owners also don’t need coverage for other structures like a detached garage or shed, whereas homeowners do.
The average cost of homeowners insurance is around $1,200 a year, while the average cost of condo insurance is $488 a year, according to the NAIC. However, condo owners have to pay HOA membership fees in addition to condo insurance, which may raise their overall monthly costs.
Below are some factors that can affect the price of your condo and homeowners insurance premiums.
Your ZIP code
Discounts you qualify for
Any additional coverages
If you own a second home or rental property, you will need homeowners insurance to cover damage to the residence and your personal belongings. Here’s what you need to know about finding the right second home insurance policy.
Condo insurance protects the interior of your condo and your personal belongings when they're damaged or stolen.