Is Condo Insurance Different From Homeowners Insurance?

Property insurance protects financial assets against unexpected events, safeguarding dwellings and possessions. The required coverage depends on the property type and ownership structure. Understanding these distinctions ensures adequate protection against potential damages and liabilities.

Homeowners Insurance Coverage

A standard homeowners insurance policy covers the physical structure of a house and attached structures like a garage. It covers repairing or rebuilding the dwelling if damaged by perils like fire, windstorms, or vandalism. Personal belongings, such as furniture, electronics, and clothing, are also protected.

Homeowners insurance also provides liability coverage, protecting the homeowner if someone is injured on their property and they are found legally responsible. It can also cover medical payments for minor injuries to guests, regardless of fault. While offering broad protection, these policies exclude damage from events like floods or earthquakes, which require separate policies or endorsements.

Condo Insurance Coverage

Condo insurance, often referred to as an HO-6 policy, is designed for condominium ownership. Unlike a traditional house, a condo owner owns the interior space of their unit, from the “studs in.” An HO-6 policy covers the interior elements of the unit, such as drywall, flooring, fixtures, and built-in appliances.

It also covers the owner’s personal belongings within the unit, similar to a homeowners policy. It includes personal liability protection for incidents inside the condo unit or away from the property. A key aspect of condo insurance is its interaction with the condominium association’s master policy.

The master policy, purchased by the homeowners association (HOA), covers the building’s exterior, common areas like lobbies and fitness centers, and the overall structure. Master policies can vary significantly, ranging from “bare walls-in” coverage, which only protects the building’s shell, to “all-in” or “single entity” coverage, which extends to fixtures and appliances originally installed in the units. Understanding the master policy’s scope is important because it dictates how much coverage an HO-6 policy needs for the unit’s interior. HO-6 policies often include “loss assessment” coverage, which helps cover an owner’s share of damage to common areas if the master policy’s limits are exceeded or a high deductible applies.

Distinguishing the Policies

The primary difference between homeowners and condo insurance lies in the scope of structural coverage. Homeowners insurance covers the entire physical structure of a detached house, including the roof, foundation, exterior walls, and the land it occupies. This comprehensive structural coverage aligns with the sole ownership of the entire property by the homeowner.

In contrast, condo insurance focuses on the interior of the unit because the condominium association’s master policy covers the building’s exterior and common elements. This distinction arises from the shared ownership model in condominium living, where unit owners collectively own the common property through the HOA. The HO-6 policy fills gaps left by the master policy, protecting the unit owner’s interior investments.

While both policy types provide personal property and liability coverage, the division of responsibility for the physical structure remains the primary differentiator. For instance, if a fire damages an entire building, a homeowners policy would cover rebuilding the entire house, whereas a condo owner’s HO-6 policy would cover their unit’s interior, with the master policy handling the building’s exterior and shared spaces. Understanding the HOA’s master policy, especially whether it is “bare walls-in” or “all-in,” is important for a condo owner to determine the necessary extent of their HO-6 coverage.