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Homeowners vs. condo insurance
| Homeowners (HO-3) | Condo (HO-6) | |
|---|---|---|
| Building structure, roof, exterior | Covered | Usually the association’s master policy |
| Interior walls, floors, cabinets, fixtures | Covered | Covered (“building property”), depending on master policy |
| Improvements you make | Covered | Covered; master policies often exclude owner upgrades |
| Belongings | Covered | Covered |
| Personal liability | Covered | Covered inside your unit |
| Common areas | Not applicable | Master policy; loss assessment cover for your share |
| Average cost | About $2,948 a year | About $499 a year |
Sources: ValuePenguin (Aug 2026); Insurify 2026 report for the homeowners average; Maryland Insurance Administration.
Understanding the master policy
Your condo association buys a master policy, paid for through your dues, that covers common areas such as hallways, elevators, roofs and shared amenities, and association liability. Master policies come in different scopes:
- Bare walls: covers the structure only. You insure everything inside your unit, from drywall to fixtures.
- Single entity: also covers original fixtures inside units, but not your upgrades.
- All-in: covers fixtures and improvements inside units too, leaving you to insure belongings and liability.
Ask your association for the master policy or its summary, and read your condo bylaws. They decide where the building coverage ends and yours begins. Maryland’s regulator notes, for example, that owners’ improvements made after the developer first sells a unit are excluded from the master policy there.
Coverages condo owners should have
- Building property (Coverage A): enough to rebuild your unit’s interior to the standard your bylaws require, plus your upgrades.
- Personal property: belongings, ideally at replacement cost.
- Loss of use: rent and extra costs if your unit is uninhabitable.
- Liability: injuries in your unit and damage you cause to neighbors, such as an overflowing bathtub leaking into the unit below.
- Loss assessment: if the association’s costs exceed its insurance (for example a large deductible or an injury claim) and it bills owners, this pays your share up to the limit. It usually costs a little extra and is especially valuable when master policy deductibles are high.
- Water backup and flood: the same exclusions as homeowners policies apply; see our flood guide.
Example: a leak between units
A washing machine hose bursts in your unit and water soaks through to the unit below. Depending on your master policy and bylaws, the association’s insurance may pay for damage to the building structure, but the costs often fall on you in other ways. Your HO-6 building property cover pays to replace your own damaged floors and cabinets; personal property cover replaces your belongings; liability cover pays for your neighbor’s damaged belongings if you’re found responsible; and if the association’s claim falls under a large master deductible that it passes on to owners, loss assessment cover pays your share. Without an HO-6 policy, all of that comes out of your pocket.
That’s why many lenders require condo owners to carry HO-6 cover, and why it’s worth checking the master policy deductible before choosing your loss assessment limit.
What condo insurance costs
| Cheapest states | Avg / yr | Most expensive states | Avg / yr |
|---|---|---|---|
| North Dakota | $310 | Florida | $1,084 |
| Utah | $314 | Texas | $907 |
| Wisconsin | $325 | Louisiana | $873 |
| Ohio | $349 | Mississippi | $699 |
| Iowa | $354 | Oklahoma | $682 |
Among insurers in ValuePenguin’s sample (quotes in New York, Dallas and Philadelphia), State Farm averaged $552, Farmers $612, Liberty Mutual $780 and Progressive $1,008, a $456 spread for similar coverage. Comparing quotes pays off.
Townhouses and co-ops
Townhouse owners may need a full homeowners policy or a condo policy depending on whether they own the structure and land; the HOA documents decide. Co-op owners typically buy a policy similar to HO-6 that covers their unit’s interior, belongings and liability. If you’re buying for the first time, see our first-time buyer guide; renters should see our renters insurance guide.
Frequently asked questions
Do I need condo insurance if my HOA has a master policy?
Usually yes. The master policy covers common areas and the building, but not your belongings or liability, and often not your unit’s interior or upgrades. Many lenders require HO-6 cover.
How much does condo insurance cost?
About $499 a year on average, according to ValuePenguin’s August 2026 data, from about $310 in North Dakota to $1,084 in Florida.
What is loss assessment coverage?
It pays your share when the association bills owners for a loss its insurance doesn’t fully cover, such as a large master policy deductible.
Is condo insurance cheaper than homeowners insurance?
Yes, about $1,652 a year less on average, because the association’s master policy covers the building.
How much dwelling coverage does a condo owner need?
Enough to rebuild the parts of the unit you’re responsible for under your bylaws, including improvements. Check the master policy type to decide.
Sources
- ValuePenguin – Average cost of condo insurance (Aug 2026)
- Maryland Insurance Administration – Consumer guide to homeowners insurance
- Washington Office of the Insurance Commissioner – Homeowner insurance guide (2025)
- Insurify – Home insurance price projections 2026
- FEMA – Your NFIP flood insurance decision (Oct 2024)
Insurance prices, discounts and rules change often and vary by state. Figures were checked in October 2026; confirm details with the insurer or your state insurance department.