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Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
Updated
Condo insurance is a type of homeowners policy designed specifically for condominium owners. Coverage is generally “walls in” since you own the inside of the unit and the association owns the outside.
Your condo association’s insurance covers the building structure, while you’re financially responsible for everything inside your walls — including your personal belongings and liability. Knowing what the condo association’s master policy and your condo insurance policy each cover 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.
Condo insurance, also called an HO-6 policy, is a type of homeowners insurance that protects your home from named perils like windstorms, fire, and theft.
Most policies protect the unit’s interior and offer liability coverage, plus loss of use insurance if you need temporary accommodations after a covered event.
Mortgage lenders typically require condo insurance, and most condo associations have minimum coverage requirements for condo owners.
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.
Compare rates and get the coverage you need for your condo.
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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]
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.
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 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.
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.
Loss assessment coverage helps pay your share of special assessments for certain expenses if your association’s master policy doesn’t fully cover a claim. While some loss assessment coverage often comes standard with condo insurance, limits are typically low, so it may make sense to add extra coverage to avoid paying out of pocket.
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.
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.
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.
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.
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.
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.
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.
Condo insurance discount options vary widely by insurer, so it’s important to check with your insurance agent to find out what discounts you may be eligible for. Here are some common discounts that could help you save on condo insurance.
Bundling: Buying auto and condo policies from the same insurer can help you earn a multi-policy discount.
Security features: You may qualify for a discount if your condo has an alarm system, smoke detectors, and dead bolts.
Claims-free: Maintaining a clean claims record could earn you a discount on rates.
Pay in full: You may be eligible for a discount if you pay your entire annual premium up front instead of making monthly installment payments.
Paperless billing: Some insurers offer a discount when you choose to go paperless.
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.
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When you’re ready to buy condo insurance, follow these steps:
Understand your requirements. Check your coverage requirements with your mortgage lender and condo association.
Review your master policy. Know what the condo association covers so you don’t over- or underinsure your unit.
Inventory your belongings. Create a list of your personal property to determine how much coverage you need.
Get multiple quotes. Compare coverage options, exclusions, and prices from different insurers.
Choose appropriate limits. Make sure your policy provides enough coverage for your personal property, unit upgrades, and liability needs.
Consider bundling with other policies. You may save money by bundling condo insurance with your car insurance.
Protect your condo at an affordable rate.
If you still have questions about condo insurance, we’re here to help. Below are answers to some of the most common questions about condo insurance so you can better understand how it works and why it matters.
Condo insurance rates vary by insurance company and factors such as where you live, coverage amount, deductible, and discounts you may qualify for. But condo insurance coverage is usually cheaper than single-family policies because it doesn’t insure the building.
The best type of insurance to protect your condo is an HO-6 policy, also known as condo insurance. Condo insurance is designed specifically to protect condos and co-ops, but it’s important to note that condo policies insure only items that are your responsibility.
Condo insurance covers the inside of your unit, personal belongings, and liability if someone suffers injuries in your unit. The condo association’s master policy covers the building’s structure and shared areas.
It depends. Mortgage lenders and condo associations usually require you to have condo insurance. Even in cases where it isn’t a requirement, experts strongly recommend you have condo insurance to protect your investment and personal liability.
HO-6 policies are a type of home insurance specifically for protecting condo owners and their units, but not the building. HO-3 policies, on the other hand, are standard homeowners insurance policies that protect the entire structure of the home. But both HO-3 and HO-6 policies usually offer coverage for personal liability, personal belongings, and loss of use.
It depends. Condo insurance usually covers water damage from something like a burst pipe, but you may need extra coverage for sewer or drain backups. Condo insurance typically doesn’t cover flood damage or gradual leaks — you’ll likely need separate coverage for those issues.
The right coverage amounts for your condo depend on the value of your personal property and the condo association’s master policy limits. Totaling up the cost for replacing your furniture, clothing, and other belongings and reviewing your HOA master insurance policy carefully can help you calculate how much condo coverage you need.
Yes. Condo insurance is usually cheaper than home insurance because it covers only the interior of your unit, not the entire building like homeowners insurance. Your condo association’s master policy covers your building’s structure and common areas.
Compare.com data scientists analyzed rates from more than 180 home insurance companies sourced directly from Compare.com’s partner companies and Quadrant Information Services. Rates span all 50 states and Washington, D.C., and quote averages represent the mean price for a given coverage level and geographic area. To ensure data reliability, only insurers meeting minimum quote thresholds were included in the analysis.
Unless otherwise specified, quoted rates reflect the average cost for homeowners with no prior claims and good credit with a home construction year of 1980. The default coverage assumptions include:
Additional data points beyond these default values are sourced from Compare.com’s proprietary database. Rates are updated monthly.
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Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
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