Homeownership is expensive, no matter what type of property someone owns. And the cost of homeowners insurance can vary greatly depending on where someone lives, the size of the home, and the type of insurance.
If you’re debating whether you can afford to buy a single family home or a condo, make sure to factor in condo insurance vs. homeowners insurance costs. Keep reading for the full lowdown.
What Is the Difference Between Homeowners Insurance and Condo Insurance?
The difference between homeowners insurance vs. condo insurance is fairly straightforward. Both protect homeowners financially, but the policies differ in the scope of their coverage. (Neither policy should be confused with mortgage insurance, which is totally different)
Homeowners insurance protects most of the property someone owns (inside the home, outside the home, and the surrounding area). Condo insurance protects only the interior of the home. Because multiple condos share one building, the exterior and area around the condo are the responsibility of the homeowners association (HOA) master insurance policy.
You can learn more about both types of coverage by shopping around with online insurance brokers.
How Does Dwelling Coverage Differ for Home Insurance vs Condo Insurance?
When it comes to homeowners vs. condo insurance, how dwelling coverage works varies:
• Homeowners insurance: Dwelling coverage is based on how much it might cost to completely rebuild the home.
• Condo insurance: How much dwelling coverage is needed is based on what the HOA master policy covers. For example, some master policies may cover select interior structures (like drywall or ceilings) or the entire interior.
Recommended: First-Time Home Buyer’s Guide
How Does Liability Coverage Differ?
For liability insurance, coverage needs can also be different for condos and homes.
• Homeowners insurance: Liability coverage extends to the entire property (inside and outside the home).
• Condo insurance: Covers accidents that happen inside the condo.
How Does Personal Property Protection Differ?
Personal property protection works similarly whether someone has a homeowners policy or a condo policy. This type of coverage is designed to protect the policyholder’s belongings from damage and theft. HOA master policies don’t include this coverage, so condo owners need to make sure they purchase it. Both homeowners and condo owners can benefit from personal property protection.
Cost of Homeowners and Condo Insurance by State
To get a better idea of what each type of insurance costs, let’s look at the average condo insurance vs. homeowners insurance costs by state.
As with most insurance, you can lower your premiums by choosing a higher homeowners insurance deductible.
| State | Condo Annual Premium | Home Annual Premium |
|---|---|---|
| Alabama | $541 | $1,611 |
| Alaska | $396 | $1,078 |
| Arizona | $400 | $927 |
| Arkansas | $539 | $1,540 |
| California | $535 | $1,133 |
| Colorado | $417 | $1,680 |
| Connecticut | $399 | $1,662 |
| Delaware | $431 | $936 |
| Florida | $964 | $2,193 |
| Georgia | $493 | $1,424 |
| Hawaii | $310 | $1,239 |
| Idaho | $420 | $820 |
| Illinois | $398 | $1,187 |
| Indiana | $354 | $1,124 |
| Iowa | $295 | $1,083 |
| Kansas | $439 | $1,780 |
| Kentucky | $390 | $1,246 |
| Louisiana | $748 | $2,212 |
| Maine | $342 | $991 |
| Maryland | $310 | $1,165 |
| Massachusetts | $444 | $1,672 |
| Michigan | $369 | $1,059 |
| Minnesota | $312 | $1,515 |
| Mississippi | $600 | $1,727 |
| Missouri | $416 | $1,444 |
| Montana | $382 | $1,319 |
| Nebraska | $355 | $1,664 |
| Nevada | $424 | $849 |
| New Hampshire | $332 | $1,092 |
| New Jersey | $450 | $1,340 |
| New Mexico | $397 | $1,143 |
| New York | $553 | $1,471 |
| North Carolina | $456 | $1,221 |
| North Dakota | $320 | $1,408 |
| Ohio | $319 | $969 |
| Oklahoma | $631 | $2,119 |
| Oregon | $364 | $761 |
| Pennsylvania | $385 | $1,046 |
| Rhode Island | $500 | $1,743 |
| South Carolina | $500 | $1,426 |
| South Dakota | $307 | $1,351 |
| Tennessee | $473 | $1,344 |
| Texas | $790 | $2,128 |
| Utah | $269 | $778 |
| Vermont | $345 | $1,032 |
| Virginia | $352 | $1,123 |
| Washington | $374 | $960 |
| Washington, D.C. | $369 | $1,388 |
| West Virginia | $313 | $1,051 |
| Wisconsin | $280 | $876 |
| Wyoming | $379 | $1,299 |
Condo data courtesy of Ramsey Solutions; home data from Hippo Insurance
Condo Insurance vs Homeowners Insurance Cost
Once someone is ready to buy homeowners insurance or condo insurance, price is likely top of mind. When it comes to the average condo vs. homeowners insurance cost, homeowners is $1,680 per year and condo is $429 per year.
Types of Condo Insurance
There are a few types of condo insurance to be aware of:
• Personal property. When someone has personal property protection, they can be reimbursed for the cost of repairing or replacing their belongings, such as clothing and electronics, up to a certain amount.
• Loss of use. If the owner needs to leave their condo to stay in a hotel during repairs after a covered incident occurs, loss of use coverage can help pay for things like hotel stays and dining out.
• Liability. Liability coverage can help out if the condo owner is legally responsible for damage or injuries caused to someone else due to an accident that occurs in their condo.
• Dwelling. This type of coverage steps in to pay for replacing or repairing everything in the condo unit (starting from the drywall in) after a covered loss.
• Loss assessment. If an accident occurs in a shared area of a condo’s property (like the pool, stairs, or clubhouse), then the HOA master policy is the first line of defense. However, if damages exceed the amount that this policy will cover, then the residents may end up responsible for covering the remaining costs, which is where loss assessment coverage can come to the rescue.
Recommended: The Difference Between Homeowners Insurance and Title Insurance
Condo Insurance Benefits
While the HOA does have some insurance coverage that protects parts of condo units, residents really need to have their own condo policies to make sure they’re fully protected. The benefits of condo insurance are many, from covering repairs to replacing belongings after a break-in to paying medical bills after a guest slips and falls.
Condo owners who are still unsure what sort of policy to choose may benefit from reading How Much Home Insurance Do I Need?
Types of Homeowners Insurance
These are the main homeowners policy options:
• HO-1: Only dwelling protection. Also known as hazard insurance.
• HO-2: Includes personal belongings and extra perils on top of basic coverage.
• HO-3: Includes dwelling, belongings, and liability coverage. This is the most popular type of coverage.
• HO-4: Applies to policyholders who rent out their home and want liability and personal property coverage.
• HO-5: This is a comprehensive policy that usually applies to brand-new homes and comes with extra coverage.
• HO-6: The term HO-6 is another way of saying condo insurance.
• HO-7: This type of coverage is for mobile homes.
• HO-8: Robust coverage for older and historical homes.
It’s always possible to change homeowners insurance policies if someone decides they want more coverage.
Homeowners Insurance Benefits
The type of homeowners policy someone has influences the benefits of their policy. Generally speaking, the point of this insurance is to financially protect homeowners from disastrous events that can destroy a home, but it can also protect against theft and liability.
If you have a mortgage, homeowners insurance may be required by your lender.
The Takeaway
If someone owns a home or a condo, they need some type of insurance coverage to protect themselves from financial hardship. Homeowners policies typically include dwelling coverage for the building itself, while condo policies do not. Both cover the contents of the home, and may include liability coverage too. The average annual cost of a homeowners policy is $1,680, while the average annual condo policy is $429.
If you need a new homeowners policy, you can turn to SoFi. We teamed up with Experian to deliver homeowners insurance built for the 21st century — without brokers. Policies are customizable, and getting a quote online takes just minutes.
FAQ
What is the key difference between a homeowners and a condo policy?
The main difference between condo and homeowners insurance coverage is what each type of insurance protects. Condo insurance only protects the interior of the condo whereas homeowners insurance protects the entire property including the outside of the home and the land around it.
Which type of property insurance coverage is more expensive?
Generally homeowners insurance is more expensive (average cost of $2,777 per year) than condo insurance (average cost of $759 per year). That being said, the location, size, and repair cost of the property can lead to a condo being more expensive to insure than a single family home.
What’s the difference between HO3 and HO6?
An HO3 policy protects a single family home with dwelling, belonging, and liability coverage. An H06 policy on the other hand is designed for condo owners to protect the inside of the condo, as well as providing belonging and liability coverage.
Photo credit: iStock/miniseries
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