- Condo insurance usually covers your unit’s interior, belongings, additional living expenses, and liability, while homeowners insurance typically covers the full structure of the home, other structures, belongings, additional living expenses, and liability.
- A condo association’s master policy often covers shared areas, but condo owners may still need protection for gaps, deductibles or loss assessments.
- Homeowners insurance often covers more of the property, which is one reason condo insurance may sometimes cost less.
- Whether you own a condo or a house, it’s important to have enough dwelling, personal property and liability coverage.
Key Differences Between Condo and Home Insurance
When you compare condo and homeowners insurance, the biggest difference is what part of the property you own and need to protect. Understanding that can help you choose coverage that fits your living situation.
Key Takeaways
Quick takeaway: Condo insurance usually covers your unit’s interior, belongings and personal liability, while homeowners insurance generally covers structure of the house, detached structures, belongings, and personal liability.
What you need to insure
What you own, and therefore need to insure, is the biggest difference between homeowners insurance and condo insurance. With a house, you usually own the structure and the land. With a condo, you generally own the unit from the studs in, while common areas like the roof, hallways and shared amenities are owned by the condo association. It’s important to know, though, there could still be times when you’re asked to pay for damage outside your unit.
Loss assessment coverage protects condo owners when there’s a larger, more significant claim involving the building or its common areas. For example, let’s say the building experiences wind damage. If the cost of damage exceeds the association’s master policy, then you and the other condo owners may be responsible for paying the difference, and the condo association may have owners split the deductible. Loss assessment coverage can usually cover this cost, which helps prevent a personal financial strain due to a covered loss.
| Coverage question | Condo insurance | Homeowners insurance |
|---|---|---|
| What are you usually insuring? | Your unit’s interior, your belongings and your liability | Your home’s structure, attached and detached structures, your belongings and your liability |
| Who usually covers shared spaces? | The condo association’s master policy | Not applicable for most stand-alone homes |
| Can you still have out-of-pocket responsibility? | Yes, especially through deductibles or loss assessments | Yes, based on your deductible and coverage limits |
Homeowners insurance usually covers more of the structure
In many cases, homeowners insurance covers more of the physical property because a homeowner is responsible for more of it. For example, if a fence at your condo is damaged after a windstorm, the condo association’s insurance will probably cover it. If the damaged fence is on your property, your homeowners insurance will typically cover it.
Is condo insurance cheaper than home insurance? It can be. Since condo owners usually insure less of the structure than homeowners do, condo coverage may cost less. Still, the actual cost depends on your location, limits, deductible and the association’s master policy.
The condo association master policy
A condo association typically has a master policy that covers damage to certain parts of the property, but it doesn’t cover everything. A condo policy begins where the master policy ends.¹ This doesn’t apply to a homeowner with a standard homeowners policy.
Want a closer look at how these policies work together? Learn about the differences between condo insurance and HOA insurance.
Having the right amount of dwelling coverage
If you own a condo, it’s important to review the condo association’s master policy. This will explain what the association is responsible for and how high its coverage limits go. Items like flooring, inner walls, countertops and fixtures are typically your responsibility as a condo owner, so it’s important to have adequate dwelling coverage.
If you own a house, remember that replacement value isn’t the same as market value; the former is preferred to ensure adequate coverage because your home’s market value might not cover rebuilding costs. Having the right amount of dwelling coverage is important whether you own a condo or a home: Too much may mean you’re paying for more coverage than you need, while too little could leave you without enough protection to rebuild after a fire or other disaster.
Want more info? Find out more about what may be covered inside your unit and possible discounts on your condo insurance.
Liability coverage for condo
Regarding liability, if a guest at your condo is injured in a common area such as the pool, costs related to that injury may be covered by the association’s insurance. However, with the same injury at your house, your homeowners insurance can help cover the accident. It’s important to have adequate liability coverage because you can’t predict where or how an injury might occur. You can also secure extra protection with umbrella insurance, which extends liability coverage beyond the limit of your condo or homeowners policy.
Personal property coverage
The contents of your home – your personal property – is another area to review because coverage limits can differ between a home policy and a condo policy. Whether you own a house or a condo, it’s a good idea to take inventory of your belongings and understand your coverage limits – that is, how much would be covered after a loss. When taking inventory, estimate the value of your possessions and take photos. This can help you choose the right amount of coverage for your personal property and make a future claim easier to document.
Common coverage comparisons
If you’re comparing property types, these quick distinctions can help:
- Condo vs. homeowners insurance: Condo insurance is designed for unit owners who share a building and common areas, while homeowners insurance is designed for people who own the full home and property.
- Condo vs. townhouse insurance: The right policy often depends on ownership structure. Some townhouses are insured more like condos, while others are insured more like stand-alone homes.
- Condo insurance vs. renters insurance: Condo insurance may include protection for parts of the unit you own, while renters insurance is focused on a tenant’s belongings, liability and additional living expenses.
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FAQs about condo vs. homeowners insurance
The biggest difference is ownership. Condo insurance is usually for the unit’s interior, your home's structure, attached and detached structures, your belongings, and your liability.
Condo insurance can be less expensive than home insurance because condo owners often insure less of the structure. But the price still depends on your property, location, deductible, limits and the condo association’s master policy.
That depends on how the property is legally owned and what the association covers. Some townhouse owners need a policy more like condo insurance, while others need coverage closer to homeowners insurance.
Renters insurance is for tenants and usually covers belongings, loss of use and liability. Condo insurance is for owners and may also cover interior building items that fall under the owner’s responsibility.
Coverage may vary by state and policy.
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