The Complete Guide to Condo Insurance in 2025

Condo insurance is a type of homeowners policy designed specifically for condominium owners. Unlike traditional home insurance, which covers the entire structure, condo insurance focuses on the interior of your unit and your personal belongings.

Condos operate under a two-layer coverage system: the master policy held by the condo association and your personal condo insurance policy. Knowing what each covers can help you avoid costly coverage gaps.

In this article, we break down how condo insurance works, what it covers, the costs, and how to make sure you have full protection.

How Condo Insurance Works

Coverage for your condo and the building is a two-layer system. Your condo association’s master policy covers the building’s exterior, shared spaces, and structural elements. Your personal condo insurance policy — also called HO-6 insurance — covers everything inside your unit, like the walls, floors, appliances, and your personal belongings.

Think of it like a pizza. The association covers the crust and box. Everything you put on top, like cheese, toppings, and sauce, is your responsibility. Your HO-6 policy covers those “toppings,” including your stuff, the walls, and any renovations.

Let’s take a closer look at everything condominium insurance actually covers.

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What Condo Insurance Covers

While the condo association’s master policy handles the exterior and shared spaces, your policy picks up where theirs leaves off. Coverage includes your personal belongings, interior finishes, and the cost of temporarily moving out of your condo because of damage. 

Here are the four main areas condo insurance typically covers.^[1]

Personal property

Condo insurance helps pay to repair or replace your personal belongings due to damage, theft, vandalism, or fire damage. This includes:

• Furniture

• Clothing

• Electronics

• Kitchenware

• Decorations

• Appliances

Be sure to take inventory of your belongings to determine your insurance needs. If you have high-value items like jewelry or collectibles, ask about higher coverage limits for them. You may need scheduled personal property coverage for more expensive belongings.

Interior elements

Also called building property or dwelling coverage, this part protects the inside structure of your unit. Depending on what your condo’s master policy covers, your policy may need to include coverage for:

• Built-in appliances

• Fixtures and lighting

• Cabinets and countertops

• Walls, ceilings, and floors

If you’ve made upgrades, like custom tile or new hardwood floors, you’ll want to ensure your policy includes enough coverage to repair or replace those improvements.

Liability protection

Liability coverage helps cover legal costs, medical bills, and settlements if someone suffers injuries inside your condo or you damage someone else’s property. It’s especially important in shared buildings, where issues in one unit can easily affect others, like a leak damaging the unit below.

Typical coverage limits range from $100,000 to $500,000, and you can increase them based on your needs. Experts recommend buying enough personal liability to cover your net worth in case someone sues you.

Additional living expenses

If you can’t live in your condo after a fire or severe water damage, for example, your policy helps pay temporary living costs while you repair your unit.^[2] 

Things your policy covers include:

• Hotel or rental stays

• Restaurant meals

• Laundry services

• Transportation and parking fees

This part of your policy — called additional living expenses (ALE) or loss of use coverage — helps pay for costs beyond your normal living expenses. For example, if you usually spend $300 per month on groceries but now spend $600 dining because you can’t cook, your policy may cover the $300 difference.

ALE helps you maintain your standard of living without paying extra out of pocket during a difficult time.

What Condo Insurance Doesn’t Cover

Some common exclusions that condo insurance doesn’t cover are:

• Building exteriors and common areas, which the master policy covers

• Wear and tear or maintenance issues, including mold, rust, and gradual leaks

• Earthquake and flood damage, which usually requires separate earthquake and flood insurance policies

• Animal and pest damage

• Intentional damage you cause

• Losses beyond your condo policy limits or excluded from coverage

Condo policy coverage and exclusions can vary by insurance company. Always review your policy or condo insurance quote to understand any specific exclusions.

Understanding Your Condo Association’s Master Policy

Before buying condo insurance, you need to understand what your condo association’s policy covers to determine where its responsibility ends and yours begins. Master policies protect shared property and parts of individual units, but the extent of coverage varies depending on the type of policy your association has.

Master policy coverage usually comes in one of the three forms detailed below.

Bare walls coverage

A more limited type of master policy, bare walls coverage usually covers only the structure and shared elements, such as exterior walls, roofs, and common areas.

Coverage stops at a unit’s drywall or studs, so you’re responsible for covering everything inside your unit, including cabinets, flooring, fixtures, and paint.

Single entity coverage

A single entity policy goes beyond bare walls by including standard finishes the builder installed initially, such as flooring, countertops, and fixtures.

But if you’ve made upgrades, like granite countertops or custom cabinetry, you’ll need your own coverage to protect those improvements.

All-in coverage

The most comprehensive type of master policy, all-in coverage includes all original and upgraded finishes within your unit, plus common areas and structural elements. Although it reduces the coverage you need, you’ll still need personal property coverage and liability protection.

Condo Insurance vs. Homeowners Insurance

While condo insurance and homeowners insurance share some similarities, like personal property and liability coverage, the protection each provides differs.

Check out the table below comparing condo insurance and homeowners insurance.

Coverage Type	Homeowners Insurance	Condo Insurance
Building structure	Entire home	Only your home’s interior
Personal property	Included	Included
Liability	Included	Included
Exterior walls	Included	Included (master policy only)

Homeowners insurance covers the whole structure of your home. Condo insurance focuses on the interior of your unit, since your condo association’s master policy usually covers the exterior. This difference is also why condo insurance is usually more affordable than homeowners insurance.

How Much Does Condo Insurance Cost?

Condo insurance costs can vary widely depending on several key factors, including:

• Location: Insurance usually costs more in coastal and disaster-prone areas.

• Coverage limits and deductibles: Higher dwelling or personal property limits increase your premium. A lower deductible also increases your rates.

• Unit and building age: Older buildings may cost more to insure because they’re more likely to have issues than new constructions.

• Claims and credit history: Filing claims or having a poor credit history can increase your costs. Insurers consider both as indicators that you’ll file more claims in the future.

• Master policy type: If the condo association’s policy covers interior elements, your personal coverage limits and insurance costs may be lower.

The national average cost for condo insurance in 2022 was $572 per year, according to the National Association of Insurance Commissioners (NAIC).^[3] Homeowners insurance costs around $1,569 per year.

Do You Need Condo Insurance?

You usually need condo insurance if you have a mortgage or your condo association requires it. Otherwise, it’s optional, but highly recommended if you own valuable items, want protection against liability, or want to cover loss of use expenses.

For example, let’s say your unit catches fire and you lose your belongings and your living space. Condo insurance can help you pay for new personal property, temporary housing, and extra living expenses.

You might not need condo insurance if you paid off your unit, you don’t have many expensive personal possessions, or you can cover repair and replacement costs out of pocket.

How to Buy Condo Insurance

When you’re ready to buy condo insurance, follow these steps:

1. Understand your requirements. Check your coverage requirements with your mortgage lender and condo association.

2. Review your master policy. Know what the condo association covers so you don’t over- or underinsure your unit.

3. Inventory your belongings. Create a list of your personal property to determine how much coverage you need.

4. Get multiple quotes. Compare coverage options, exclusions, and prices from different insurers.

5. Choose appropriate limits. Make sure your policy provides enough coverage for your personal property, unit upgrades, and liability needs.

6. Consider bundling with other policies. You may save money by bundling condo insurance with your car insurance.

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