Condo vs. Homeowners Insurance: What’s the Difference?

Your condo association may cover many of the risks that a homeowner would otherwise need insurance for.

Condo insurance and homeowners insurance are very similar in that both provide the owner with coverage for the inside of the home, their personal property, as well as protection for personal liability.

The difference between the two policies is how they handle insuring the structure of the home.

HO3 vs. HO6

A homeowners insurance policy – or HO3 policy – covers both the outside and inside structure of the dwelling.

By contrast, condo insurance – or an HO6 policy – usually only covers the inside of the individual unit. In most cases, your condo association’s insurance will cover the exterior of the building, common use areas, and the condo building surroundings.

A condo association’s master policy can be one of two types – an “all-in” policy which covers the fixtures of your condo, such as carpets and fitted appliances, or a “bare walls-in” policy, which does not cover anything within the walls of your condo.

Depending on your condo association’s master policy, condo insurance can provide coverage for the following.

Building Property

Provides cover for the interior of the property including walls, floors, ceilings and built in furnishings e.g. cabinetry, that are considered for your sole use and not that of other condo owners

Personal Property

Cover for your personal belongings inside the condo, including appliances. Limits may apply and you may need to purchase additional coverage for high-value items, for example artwork and jewelry

Personal Liability

Protects you if someone is injured on your property or you damage someone else’s property and are found to be liable. Such coverage includes legal fees and medical expenses where applicable. The liability coverage works in tandem with the Association’s insurance which covers common area liability only

Loss of Use

In the event that your condo becomes uninhabitable as a result of a catastrophe, your insurer will cover the relevant increased costs related to alternative accommodation, such that you and your family can continue to maintain your current standard of living

How Do You Know Which Policy Is Right for You?

When deciding the type of condo insurance you require and the value to be covered for, it’s worth speaking to your condo association to understand the level of protection you are afforded under their specific master policy. This way you are not purchasing insurance you don’t need, nor are you under-insuring your home.