Condo insurance vs. homeowners insurance: What are the differences?

By Allstate

Last updated: January 1

One of the main differences between homeowners and condo insurance is how much the policy needs to protect. When you own a home, you're responsible for both the inside and outside — including the land, garage and any other structures on the property. However, when you own a condo, you're typically only responsible for the interior of your unit and your personal property.

While condo and homeowners insurance both offer similar coverages, there are differences — just as there are differences between the two types of homes. Learn more about how homeowners and condo insurance help protect your home.

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Condo insurance and condo association insurance

There are two types of condo insurance policies, one for individual condo insurance owners and another for the condo owners association, says the Insurance Information Institute (III). Your individual condo insurance policy helps to protect your personal unit — helping to pay for damages to your home and personal belongings. A condo association insurance policy typically covers the building, including the roof and siding, and common or shared areas, such as hallways and pools. Also called the master policy, the condo association's policy sometimes extends to the interior of the unit, says the III. In these cases, the master policy may cover standard fixtures, bare walls, floors and ceilings within each condo unit.

Typically, you'll only need to purchase insurance for your own personal condo unit, and the association's board will take care of getting the master policy for the building and shared spaces. (Keep in mind that your association dues pay for the insurance as well as other routine costs, such as maintenance.) It is a good idea, however, to understand what the association's policy covers and to be sure your insurance policy will help pay for necessary repairs to your home after a covered incident.

Loss assessment coverage

Condo owners can also add loss assessment coverage to their insurance policy. This optional coverage may help protect against having to pay out of pocket for a special assessment the association issues for expenses related to an insurance claim. If the association's coverage limit, which is the maximum amount the insurer will pay toward a covered claim, isn't high enough to pay for the full cost of repairs or medical bills, it might issue a special assessment to each condo owner to cover the remaining amount owed on the bills. If you have loss assessment coverage and receive an unexpected assessment from your association, you can file a claim to help cover the costs.

Dwelling coverage

Dwelling coverage, which is also called dwelling insurance, is a feature of homeowners insurance that helps to pay to repair or rebuild the physical structure of a house and attached structures if they are damaged by a covered peril. Standard dwelling insurance helps cover damage from hazards such as fire, hail, theft or ice.

With condo insurance, however, you'll typically only need enough coverage to repair or rebuild the interior of your unit. Repairs to the outside of the building, exterior walls, hallways, elevators, etc., would generally be the condo association's responsibility. For Allstate condo insurance, Dwelling Protection (Coverage A) becomes Building Property Protection (Coverage A). There is no coverage B Other Structures Protection for condo unit owner insurance.

Liability coverage

If someone is injured while visiting your condo, liability coverage may help cover the related legal and medical costs if you're found responsible for the accident. This coverage can also help if you're found liable for accidentally damaging someone else's property. As a condo owner, liability coverage can help you avoid paying out of pocket in these situations, but you typically don't need liability protection for claims involving common areas. For example, if a visitor slips on the building's front stairs and breaks an ankle, your association's insurance will typically kick in.

The biggest difference between condo and homeowners liability coverage is that a homeowner needs coverage for their entire property. For example, a single-family home with a garage and shed may require more liability coverage than a similarly sized condo, because the condo owner only has to cover their unit — not the land or any additional structures.

Personal property coverage

Whether you own a condo or a single-family home, it's likely filled with the stuff you own — from furniture to clothing. Personal property coverage protects your belongings and will help pay to repair or replace them after a covered loss. While personal property coverage is essentially the same for homeowners and condo owners, it is important that condo owners keep in mind that the condo association master policy's coverage will not usually extend to your belongings. With both homeowners and condo insurance, you'll need to make sure you have enough coverage to protect the value of your personal belongings.

Townhouse insurance coverage

You may picture a townhouse as a few homes with shared walls between them and a condo as a larger building with multiple units on each floor. While there are certainly differences between the two styles of homes, the way they are insured is generally the same. There is no specific "townhouse insurance," as condo insurance will usually cover either type of home. Each unit owner should have their own individual policy, and a condo or homeowners association should have a master policy covering the shared elements, such as a roof, walls and walkways, says the III.

Condo or renters insurance

If you are renting a condo unit or a townhouse, you likely don't need to have a condo insurance policy. Your landlord should have a condo insurance policy that would help to repair or rebuild the unit after a covered peril, such as a fire. However, you may want to consider having a renters insurance policy. Sometimes called tenant insurance, renters insurance helps provide protection for your personal belongings if they are stolen or damaged in a covered peril. Similar to condo insurance, renters insurance generally includes liability coverage. This coverage can help with the costs of legal or medical bills if someone is injured in your rental home or you are found responsible for accidentally damaging someone else's property.

Even though condo and homeowners insurance provide similar coverage, it is important to have the insurance that best fits your situation and needs. If you have questions about either condo or homeowners insurance, talk to your insurance provider.