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The Basics of Condo Insurance Coverage

More than 28 million Americans now live in condominium communities. While these communities occupy a unique space between detached home ownership and apartment rentals, they all share a common thread: insurance. In the same way that home insurance and renter’s insurance help protect against damage to your personal property and accidental injury, condo insurance reduces your financial risk by providing coverage for unexpected events. 

That said, there are some key differences between condo insurance and these other policies. Learn how condo insurance coverage works, how it differs from master condo association insurance, what types of coverages are available, and what you can expect when buying condo coverage to protect your home.

What Is Condo Insurance?

Condo insurance, also known as an HO-6 policy, is a specific type of homeowner’s insurance that covers damage to or theft of property in your condo. It also provides protection if a guest is injured in your condo. Before obtaining a mortgage for your condo, lenders may ask to see proof of your condo insurance policy to protect their investment.

It’s worth noting that HO-6 policies are distinct from master condo coverage. Instead of providing individual coverage, master condo coverage is purchased by the condominium association that oversees all of the condos within the community. It covers damages to the outside of the condo building and common spaces such as lobbies or hallways, as well as providing coverage for injuries sustained in common areas. Condo fees typically include condo owners’ contributions to the shared master condo coverage policy premium.

What Counts as a Condo?

A condo is an owned unit within a larger property complex comprised of multiple units. From a practical standpoint, condominiums often look much like apartment buildings: Both contain individual units connected by common hallways, elevators, staircases, and lobby areas. They may also include outside amenities, such as playgrounds or tennis courts.

Where condos differ from apartments is that residents own their own units and have shared ownership of the common building areas. Common-area ownership is managed by a condo association, which is made up of condo owners. Owners pay a monthly fee to this association for regular upkeep and maintenance but may be billed larger, one-off fees if more substantial repairs are needed. 

Why Do Condo Home Owners Need Different Homeowner’s Insurance?

Standard homeowner’s insurance covers the home itself, along with the surrounding property, such as the front and back yards. This is because the entire property falls under the purview of the homeowner. For instance, if you live in a detached house and a storm causes damage to your roof and driveway, your home insurance policy would cover the cost of repairs up to policy limits.

But condo owners have different coverage needs than the owner of a detached home. Because condos have shared spaces and do not necessarily include things like detached structures, condo insurance only includes the coverages relevant to condo owners. For example, most condo owners will not need coverage of other structures, such as sheds and detached garages. This is included in most standard home insurance policies, but not in condo insurance policies.

Condo insurance only covers the condo unit’s “four walls in.” This means it provides coverage for the condo unit’s walls and everything within them. Property outside the unit’s walls, such as hallways, elevators, and common spaces, is covered by the condo association’s master insurance policy. This means that if a storm breaks your living room window, your individual condo insurance applies. However, if the storm damages the general entrance to the condo building, the claim goes through the condo association’s master insurance instead. 

What Does the Master Condo Association’s Insurance Cover?

Master condo insurance covers injuries sustained on and damages to common property, such as courtyards, lobbies, and hallways. Payment for this insurance typically comes out of condo owners’ monthly dues, which also cover basic property repairs and upkeep.

The master policy also covers some damages to your individual unit, such as if an electrical surge damages your appliances. The specific perils covered and extent of coverages depends on which of the following types of master insurance the condo association purchases:

Bare Wall Coverage

Bare wall coverage is just that — it covers the walls, floors, and ceilings of your unit and nothing else. This means damage to appliances, carpets, or light fixtures all fall under your individual condo insurance. 

Single Entity Coverage

Single entity coverage applies to fixtures and appliances along with walls, floors, and ceilings. The caveat, however, is that this coverage only applies to original fixtures and appliances and not any upgrades you make.

All-In Coverage

All-in or all-inclusive coverage protects any items built into your unit along with any upgrades you make to appliances or fixtures. If your condo association includes this coverage, you may not need any additional dwelling coverage, though you will still need personal property and personal liability coverage.

What Does Individual Condominium Insurance Cover?

Individual condominium insurance comes with several common coverage types designed to protect your dwelling and personal property, along with guests in your condo.

These coverages apply to “perils,” or specific problems that may occur in or around your condo. Insurance policies are either named peril policies or open peril policies. Named peril policies specify which perils it will cover. Open peril policies, meanwhile, only specify which perils it will not cover — these policies tend to be more comprehensive in coverage.

Whether they are named or open peril policies, all condo insurance plans typically cover damages caused by fire, theft, and vandalism. Other perils, such as damage from strong winds or water damage, may not be covered under most named peril policies, but may be covered under an open peril policy. If your condo insurance plan does not offer coverage for a peril you need, such as if you live in a state where storms pose a potential risk, you could add a policy endorsement for that specific peril if your insurer offers that option.

Standard Coverages

Most condo insurance policies include the following standard coverages: dwelling, personal property, personal liability, and loss of use. Here’s a look at each in more detail. 


Dwelling coverage applies to the walls and fixtures in your condo. If damage occurs due to a named peril or falls under your open perils list, you can submit an insurance claim. To calculate the amount of dwelling coverage you may want, a good rule of thumb is 20% of the appraised value of your condo. This means that if your condo is appraised at $500,000, you want dwelling coverage of at least $100,000.

It’s also worth noting that your association’s master condo insurance could play a role in how much dwelling insurance you should purchase. For example, if the master insurance covers bare walls, more dwelling insurance coverage on your individual condo policy can help offset costs. But if the master policy is all-in, you may be able to reduce your total amount of dwelling coverage because the other policy will already cover it. 

Personal Property

Personal property insurance covers the property within your condo against theft or damage. This includes furniture such as chairs and beds, electronics such as computers and televisions, and all of your clothing. To calculate your coverage amount, do a quick estimate of the total value of all your property, or how much it would cost to replace all of your belongings if needed. This represents the upper end of coverage. Adjust your policy to match your risk tolerance. 

Personal Liability

Personal liability insurance covers guests in your condo if they are injured or if their property is damaged. For example, if your dog bites your guest or destroys their computer during their visit, they can make a claim with your insurance company to have their medical bills covered or computer repaired up to the coverage limit offered by your policy. Ultimately, this protects you from financial liability for your guests’ injuries.

Standard HO-6 policies often include $100,000 worth of liability insurance, but you may be able to increase this amount up to $500,000 if you’re looking for more coverage. You can also consider purchasing umbrella coverage to help supplement this limit if you suspect you may need additional coverage, such as if you often entertain visitors.

Loss of Use

Loss of use provides coverage if your condo is temporarily uninhabitable because of damage from a covered event. For example, if a fire severely damages your unit and makes it unsafe to be in while it is being repaired, your condo insurance’s loss of use coverage would kick in to help pay for the costs associated with being forced into temporary living arrangements, such as hotel fees and parking fees if you stay at a hotel during the repairs.

Depending on your policy, you may receive a certain amount of money for each day you stay elsewhere, or you may submit a single claim for a specific amount. When it comes to purchasing loss of use coverage, between 20% and 30% of the value of your dwelling coverage is a good starting point.

Optional Coverages or Endorsements

In addition to standard coverages, you may also want to consider optional coverage such as scheduled personal property, water backup, and disaster coverage.

Scheduled Personal Property

Some high-value items in your condo, such as expensive jewelry or watches, may have sub-limits within your personal property coverage. For example, if you have $10,000 worth of property coverage but a $2,000 sub-limit on jewelry, the theft of a $3,000 heirloom necklace leaves you $1,000 short. 

Scheduled personal property insurance allows you to add specific items to a list or “schedule” that makes them exempt from standard sub-limits. Typically, insurers will require an appraisal of the specific item to determine its value. Further, scheduling property allows coverage on an “all-risk” or “open peril” basis, meaning that your property will be covered regardless of how it was damaged.

Water Backup

Clogged drains or broken sump pumps that result in water damage to your condo may not be covered under standard HO-6 policies. Adding water backup coverage provides protection against these issues, and can help cover repairs to damaged pipes, flooring, and more.

Disaster Coverage, Like Flood and Earthquake

Disasters such as floods or earthquakes fall outside standard policy coverages. Some insurers may offer flood and earthquake endorsements that you can add to your existing policy. However, you may also find coverage for these perils with a separate, stand-alone policy.

How Much Does a Condo Insurance Policy Cost? 

Depending on the value of your property, the type of insurance (and any additions) that you purchase, and the total value of your coverage, your cost for insurance could range from $40 to $120 per month.

Your condo insurance premium is based on several factors, including the value of your property and its contents and the amount of coverage you’re requesting. Your overall risk is also a factor: Where is your condo located? Do you have a security system installed? Are there cameras in the building?

In addition, your deductible plays a role. This is the amount you pay for a covered claim before your insurance kicks in. The higher your deductible, the lower your monthly premium since you’ll pay more out of pocket before your coverage takes over.

How to Find the Best Home Insurance for Condos

Finding insurance for a condominium means taking the time to compare multiple options from different providers and see who can offer you a good deal. Factors to consider include your monthly premium, options to increase or decrease your deductible, the type and amount of add-on coverages offered, and the ease of making a claim. Compare these options across several policies before making a final decision.