Condo insurance vs. homeowners insurance

How coverages compare under condo insurance vs. homeowners insurance

Here are the coverages included in both condo insurance (HO-6 policies) and standard homeowners insurance, as well as how they may differ:

Dwelling coverage

Dwelling coverage on a homeowners policy may pay for damage to your home's structure, including the foundation, yard, and an attached garage.

For condo policies, dwelling coverage may pay to repair or replace everything in your unit from the drywall in, due to damage from a covered peril. Damage to the outside of your unit may be covered by your condo association's master policy.

Personal property coverage

Personal property coverage works similarly with condo and homeowners insurance. Any items that aren't attached to your condo unit are typically classified as personal belongings. They won't be covered by your condo association, but your condo policy's personal property coverage may pay to repair or replace your belongings, up to your coverage limit, due to theft or damage from a covered incident. Personal property coverage can protect your belongings outside of your condo unit or home, such as items damaged in a storage shed or stolen on vacation.

As with homeowners insurance, you can add a rider to your condo policy to cover items that might be inadequately covered under your personal property coverage, such as an engagement ring or artwork.

Personal liability

On both condo and homeowners policies, personal liability coverage may help if you're legally responsible for someone else's damages or injuries. Liability coverage may also pay for medical bills if a guest is injured in your condo unit or home.

Whether you own a condo or home, your coverage limit for personal liability should be enough to protect your assets in case you're sued. Homeowners may have more liability risk considering they have to account for potential accidents on their entire property, including a swimming pool or tool shed. On the other hand, condo owners may not be responsible for injuries occurring on the grounds of their complex but outside of their unit. The condo association's master policy may cover injuries occurring in shared areas of the complex, such as a tennis court or indoor pool.

Loss of use coverage

Loss of use coverage generally works the same under condo insurance and homeowners insurance. If you're unable to live in your condo unit or home because of a covered incident, such as fire or water damage, this coverage can pay for a hotel stay, groceries above what you normally spend, and other services.

The difference comes in how your loss of use coverage limit is calculated. It depends on your insurer and policy, but condo policies often offer a limit equal to 20% of your combined dwelling coverage limit and personal property coverage limit. Homeowners policies generally provide 10% or 20% of your dwelling coverage limit.

How does loss assessment coverage work for condo insurance?

Loss assessment coverage is an optional coverage on a condo policy that may help if there's an incident in common areas of a condo complex, such as hallways, elevators, lobbies, and fitness centers.

Although the condo association's master policy provides coverage for injuries occurring in those shared spaces, you could be liable if the damage or injuries amount to more than the master policy's limit. Loss assessment coverage may pay the difference, up to your coverage limit. Condo insurers often provide $1,000 for loss assessment coverage, but you may be able to buy up to $100,000 in additional coverage, depending on your insurer.

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