Is Condo Insurance the Same as Homeowners Insurance?

Condo insurance and homeowners insurance both provide protection for residential properties, but they are distinct types of coverage tailored to different ownership structures. Understanding these differences is important for securing adequate protection. This article clarifies how these policies operate and what they cover.

Understanding Homeowners Insurance

A standard homeowners insurance policy, such as an HO-3 or HO-5, is designed for single-family homes. The owner is responsible for the entire structure and the land it occupies. This comprehensive coverage includes the dwelling, such as the roof, exterior walls, and foundation. An HO-3 policy covers the dwelling for “open perils” (all risks unless excluded), while personal property is covered for “named perils.” An HO-5 policy offers broader “open perils” coverage for both.

Homeowners insurance also protects personal belongings like furniture and electronics. It provides liability protection, covering legal expenses and damages if someone is injured on the property. Policies typically include additional living expenses (ALE) coverage, which helps with costs like hotel stays if the home becomes uninhabitable due to a covered loss.

Understanding Condo Insurance

Condo insurance, an HO-6 policy, is tailored for condominium unit owners. This policy focuses on the interior of the unit, where the owner is responsible for everything from the “walls-in” or “studs-in.” This includes interior walls, flooring, cabinetry, and any improvements made to the unit.

An HO-6 policy also covers the condo owner’s personal property, similar to a homeowners policy. Personal liability protection covers incidents within the unit, such as a guest sustaining an injury. A notable inclusion is loss assessment coverage, which helps pay for special assessments levied by the homeowners association (HOA) for damages to common areas that exceed the HOA’s master policy limits.

The Role of the Master Condo Policy

Condominium complexes are governed by a homeowners association (HOA) that maintains a master insurance policy. This master policy covers the building’s main structure, including exterior walls, roof, and foundation. It also covers common areas like lobbies, hallways, gyms, and pools. The master policy is funded through HOA dues paid by all unit owners.

The scope of the master policy varies, influencing the individual HO-6 coverage a condo owner needs. A “bare walls-in” policy covers exterior framing and collectively owned items but excludes unit fixtures. A “single entity” or “walls-in” policy covers the building and original fixtures within units, but not owner improvements. An “all-in” policy covers the entire structure, including original fixtures and any unit improvements.

Comparing Coverage Responsibilities

The fundamental difference between homeowners and condo insurance lies in the division of responsibility for the property’s structure. A homeowner with an HO-3 or HO-5 policy is solely responsible for insuring the entire dwelling, from the foundation to the roof, along with any detached structures. Their policy must cover the full cost of rebuilding the home.

In contrast, a condo owner’s HO-6 policy works with the HOA’s master policy. The master policy handles the exterior of the building and common areas, meaning the condo owner is not responsible for insuring these elements. For example, if a roof is damaged by a storm, the HOA’s master policy would likely cover repairs for a condo building. A single-family homeowner’s policy would cover their roof.

The condo owner’s HO-6 policy covers the interior of their unit, including improvements and personal belongings, which the master policy generally does not. This distinction highlights why condo insurance is not simply homeowners insurance, as it accounts for shared ownership and the specific liabilities of unit owners versus the association.