How Does Condo Insurance Differ From Home Insurance? 

You’re on the road to being a new homeowner. Congratulations. You are buying a condominium unit, and lining up your homeowners insurance policy. But what type of home insurance exactly? 

You are buying what you thought was a home. You dealt with a real estate agent and have a mortgage, and now you own a residence that will (hopefully) gain value over time, just like any other residence you might own. 

Sure, it looks a little different than the traditional house. It’s in a building with other units that are also personally owned homes. But your new place is not an apartment.  

So why do you need condo insurance and not a homeowners policy? And what’s the difference anyway? What does homeowners insurance cover? How about unit coverage? Here’s what you need to know. 

Unlocking the Mysteries of Property Insurance 

At the most basic level, homeowners and condominium policies are the same beast. In either case, you pay a premium for a certain amount of coverage and agree on a deductible level. When you suffer a covered loss, you’ll be reimbursed by your insurer, up to your coverage limits and minus your deductible. 

Then, you discover where the two policies deviate. Hint: The variation is in the structural differences between the two kinds of properties. The following info should help you read your homeowners insurance policy documents and understand the coverage you have or need for your condo. 

Homeowners Insurance 101 

You’ve got a lot going on with a traditional detached home. And outside of it. You have electrical, plumbing, and HVAC systems, walls, ceilings and a roof, a yard and driveway, and lots of personal possessions that could be lost, damaged, or destroyed. Draperies, linens, and entire wardrobes may need to be tossed due to smoke damage from a kitchen fire. 

All of that is covered, to one degree or another, through your homeowners policy. Your coverage provides financial defense against natural disasters, broken water pipes, smoke or fire, burglary or vandalism, and all kinds of incidents and accidents you can’t even imagine until you start getting the repair bills. 

Your standard homeowners policy is called HO-3 coverage. 

Condo Insurance Basics 

Your condo coverage works in much the same way as your homeowners policy. In fact, it’s sometimes called condo homeowners insurance. But there are some important differences. 

For starters, it’s called HO-6 rather than HO-3 insurance. 

Structurally and in ownership terms, a condominium is different from your traditional detached home. You own the interior space and everything in it. However, everyone who owns units in the building collectively owns the building’s exterior face and roof, driveway and pavement, and other shared environments. 

If a tornado sweeps through your complex and uproots trees, your condo association insurance pays for the property cleanup, not your own policy. (Of course, you also pay for that association policy through your monthly homeowners association dues.) 

In short, you exclusively own less property and share more of it when you own a condominium unit as opposed to buying a detached conventional house. 

Condo Insurance vs. Homeowners Insurance 

So the main difference between HO-3 coverage — a conventional homeowners policy for your traditional detached dwelling — and HO-6 coverage — a condo policy — is what you own and what you don’t own. 

What’s Protected? 

With a detached home, you own everything inside and outside of your residence, right up to the property line. In fact, your responsibility can go beyond your property, such as if one of your tree limbs falls and hits a neighbor’s garage or a car parked at the curb. Taking care of trees is one thing you can take off your fall maintenance list if you choose a condo over a stand-alone home. 

In the case of a condominium unit, you own everything on your preferred side of the welcome mat. That is, the walls, ceilings, floors, HVAC, plumbing, and electrical systems, and all of your personal belongings. 

But you don’t own anything outside of those walls. To put it more accurately, you do own all of that, but in partnership with all of the unit owners within the condominium building or campus. That’s why you’re also tagged with a monthly fee that contributes to your building’s association insurance — the policy that covers all of that shared space.

All About Liability Protection 

Regardless of the line of coverage, liability is the financial protection you receive when you have medical, legal, and related costs connected to your policy and paid for by your insurer. For instance, with auto coverage, that can include third-party injuries sustained in an at-fault car accident. 

Homeowners and condo policies also include liability, but in different ways. If you own a detached home and someone slips on your icy driveway and breaks a leg, you might be sued for medical and legal costs. Your home insurance will help to cover some of your legal costs, as well as medical costs for the person who was injured. 

But with a condo policy, there’d be no similar action. That’s because you don’t own your driveway. Your unit association might be sued, but not you personally. 

However, if a visitor trips on your kids’ toys on an interior stair step and breaks a leg, your liability coverage might well cover your guest’s medical and potential legal costs. 

Breakdown of Costs: Condo Insurance vs. Homeowners Insurance 

If you’ve just bought a unit, this section might prove to be particularly appealing. Your condo policy will almost certainly cost a lot less than homeowners coverage for a detached home of comparable cost, value, and location. 

You can probably understand why. A homeowners policy covers the entire dwelling, inside and out, the surrounding property, and your personal belongings. 

Condo coverage, on the other hand, is concerned only with the interior of your home. Therefore, your premiums might only cost a quarter as much as a homeowners policy. 

Keep in mind that both condo and homeowners policies will also cover liability and living expenses if you must relocate to temporary housing while the space is being restored after a fire or other serious damage. 

Also remember that if you live in a condominium, in effect, you’re paying for two policies. In addition to your condo coverage, your monthly dues help pay for the association insurance. 

Choosing the Right Coverage for Your Home Through Acceptance 

Regardless of the type of home you’ve just bought, your independent agent at Acceptance Insurance will help you find the most relevant coverage at the most competitive rates. That’s because independent Acceptance agents don’t work for just one insurer. They have contractual relationships with several major brands and can find the policy that best fits your home and budget. 

If you’ve just bought a condo, your agent can also review your unit association policy to see what’s covered and what your exposure might be. With that, you’ll have a better idea of how your individual condo insurance policy should be structured and what it should cost. 

Call us at 877-405-7102 or get a quick homeowners insurance quote online. You can also find an Acceptance Insurance office near you to schedule a sit-down with an agent.