What’s the difference between condo and homeowners insurance?
The main difference between a condo policy and a homeowners policy is coverage for the building structure. A homeowners insurance policy includes a dwelling coverage that is the calculated replacement cost of the house; that’s how much it would cost to rebuild it from the ground up.
Condo insurance includes something similar but far more limited. Usually called building property coverage, it covers only what the condo owner is responsible for. That excludes the exterior of the building and its actual structure. Depending on the policy, it may include everything from the walls-in (flooring, kitchen cabinets, fixtures, and more) or only a limited amount of building property. How much condo insurance you need depends on what your HOA covers.
A homeowners insurance policy covers the exterior, the interior and everything else on the property like a fence or a shed. That’s why homeowners insurance rates are generally higher than condo insurance rates.
While most of the coverages on a condo policy are the same as a homeowners policy, there are a few other differences.
For instance, condo owners may need loss assessment coverage, which helps pay any claims for which all HOA members are responsible. A condo owner’s liability coverage doesn’t cover anything that happens in communal areas, as that falls under the condo association’s policy.
Make sure you understand all of the coverages on your home insurance policy fully.
Condo vs. homeowners insurance: The basics
Here’s a quick breakdown of condo vs. homeowners insurance, what they have in common and how they differ so you know what you’re getting when you buy condo insurance.
| Condo insurance | Homeowners insurance | |
|---|---|---|
| National average annual rate* | $656 | $2,601 |
| Dwelling coverage/Building property coverage | Interior only | Interior and exterior of the home and other structures |
| Personal property coverage | Yes | Yes |
| Liability coverage | Yes, excluding common areas | Yes |
| Loss of use coverage | Yes | Yes |
| Loss assessment coverage | Yes, optional | No |
Do I need condo insurance or homeowners insurance?
Your mortgage company will tell you which type of insurance you are required to by as part of the loan contract. Generally, if you are buying a home that has an association master policy in place (there is an association that purchases coverage for the structure and common areas) you need a condo policy.
If you are buying a single-family home for which there is no master policy, you need homeowners insurance. Having a homeowners association (HOA) doesn't automatically mean you need condo insurance. While many communities do have HOAs, they generally don't buy any insurance coverage for the homes in the community.
Methodology
Insurance.com commissioned condo and homeowners insurance rates from Quadrant Data Services across all 50 states and D.C. Condo insurance rates are based on $60,000 personal property, $300,000 liability and a $1,000 deductible. Homeowners insurance rates are based on $300,000 dwelling coverage and liability and a $1,000 deductible.
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