Homeowners vs. Condo Insurance: What Each Policy Covers

Homeowners insurance and condo insurance protect the same things in spirit — your home, your belongings and your liability — but the split of responsibility is very different. With a house, you insure the whole building. With a condo, the building is shared, and the association insures part of it under its own master policy. Your condo policy fills in the rest.

Homeowners insurance

A homeowners policy is built for a house you own outright or with a mortgage. It typically includes:

• Dwelling — the structure of the house itself
• Other structures — a detached garage, a fence, a shed
• Personal property — your belongings
• Loss of use — extra living costs if a covered loss makes the home unlivable
• Personal liability — if someone is hurt on your property or you damage someone else's property
• Medical payments to others — small medical bills for guests injured at your home

You decide how much to insure the house for. The goal is enough to rebuild it, which can differ from its market value.

Condo insurance

A condo policy (often called an HO-6) is built around the association's master policy. The master policy covers the shared parts of the building and the common areas; how far it reaches into your unit depends on the association's governing documents. Your condo policy then typically covers:

• Your unit's interior — the parts the master policy leaves to you, such as walls, floors, cabinets, fixtures and improvements you made
• Personal property — your belongings
• Loss of use — extra living costs after a covered loss
• Personal liability — injuries or damage you are responsible for
• Loss assessment — your share when the association charges owners for a covered loss to common property

The question that decides your condo coverage

What does the master policy cover inside my unit? Associations differ. Some master policies cover the building's structure only, leaving everything inside the unit — down to the finishes — to the owner. Others include original fixtures and finishes. Read the governing documents or ask the association's management, and bring the answer to your broker; it determines how much interior coverage you need.

What neither usually covers

• Flood — standard homeowners and condo policies usually exclude it; flood coverage is bought separately.
• Wear and maintenance — gradual damage, neglect and maintenance issues.
• High-value items beyond the policy's limits — jewelry, art or collectibles may need extra coverage.

In coastal areas, how wind and hurricane damage is covered — and the deductible that applies to it — deserves its own look at every renewal.

Which do you need?

• You own a house → homeowners insurance.
• You own a condo unit → condo insurance, sized to what the master policy leaves to you.
• You rent → renters insurance for your belongings and liability.

Get it right the first time

GMI Brokerage Corp. arranges homeowners, condo and renters insurance from several carriers, and works with community associations in South Florida. Our agents can read your association's documents with you and match your coverage to them. See personal insurance or contact us.