Condo Insurance vs. Homeowners Insurance: What's the Difference?

If you've purchased a condo in Cerritos or surrounding Orange County areas, you might wonder: "Do I need condo insurance or homeowners insurance? What's the difference?"

The answer matters. Getting the wrong type of insurance leaves you with dangerous coverage gaps or paying for protection you don't need.

This guide explains the key differences between condo insurance (HO-6) and traditional homeowners insurance (HO-3), what condo owners actually need, and how to ensure you're properly protected.

The Fundamental Difference

Homeowners Insurance (HO-3)

Covers: The entire property—structure, land, everything

Who needs it: Owners of single-family homes, townhomes where you own the structure

What it protects:

• Entire building structure (walls, roof, foundation)

• Attached structures (garage, deck, porch)

• Detached structures (shed, fence, separate garage)

• Land and landscaping

• Personal property

• Liability

Condo Insurance (HO-6)

Covers: Your unit's interior and your personal property

Who needs it: Condo owners, some townhome owners

What it protects:

• Interior of your unit (walls in, floor to ceiling)

• Improvements and upgrades you've made

• Personal property (belongings)

• Liability

• Loss assessment (your share of common area damage)

What it doesn't cover: Building exterior, common areas, land (HOA master policy covers these)

Understanding Your HOA Master Policy

What Your HOA Covers

Every condo complex has a master insurance policy paid for by HOA fees. This policy typically covers:

• Building exterior (roof, walls, foundation)

• Common areas (lobby, hallways, elevators, pool, gym)

• Shared systems (plumbing, electrical, HVAC)

• Landscaping and grounds

• Parking structures

• HOA liability

Types of master policies:

Bare Walls-In (Basic):

• HOA covers building shell only

• You insure everything inside including drywall, flooring, fixtures

• Less common; requires more condo insurance

All-In / Single Entity:

• HOA covers original unit interior (studs, drywall, basic fixtures)

• You insure improvements, upgrades, personal property

• Most common in newer condos

Your condo insurance coordinates with the HOA master policy to fill gaps.

Why You Still Need Condo Insurance

Your HOA master policy does NOT cover:

• Your personal belongings

• Improvements you've made (upgraded flooring, custom cabinets, renovations)

• Your liability (injuries to guests in your unit)

• Loss assessment (your share if HOA master policy limits are exceeded)

• Interior damage from your unit (water damage, fire origin in your unit)

Without HO-6 insurance, you're personally responsible for these exposures.

What Condo Insurance (HO-6) Covers

1. Unit Interior (Walls-In Coverage)

Protects: Everything from your unit's walls inward

Typically covers:

• Interior walls and ceilings

• Flooring (carpet, hardwood, tile)

• Cabinets and countertops

• Built-in appliances

• Light fixtures

• Bathroom fixtures

• Paint and wallpaper

Important: What's covered depends on your HOA master policy type. Review it to know where HOA coverage stops and yours begins.

2. Personal Property

Protects: Your belongings

Covers:

• Furniture

• Electronics (TV, computer, tablets)

• Clothing and shoes

• Kitchen items

• Decorations and artwork

• Appliances you own (washer, dryer, refrigerator)

• Everything you'd take if you moved

Typical coverage: $20,000 to $75,000+

Always choose replacement cost, not actual cash value.

3. Loss Assessment Coverage

Critical for condo owners: If the HOA master policy limit is exceeded or doesn't cover something, the HOA can assess each owner for their share.

Example: Hurricane damages building roof ($500,000). HOA master policy pays $400,000. Each of 50 owners is assessed $2,000.

Loss assessment coverage pays your share (typically $1,000-50,000 coverage available).

4. Liability Protection

Protects: You if someone is injured in your unit or you damage others' units

Scenarios:

• Guest slips in your condo and breaks arm

• Your dishwasher leaks and damages neighbor's unit below

• Your child damages another unit

• Someone sues you for injury

Recommended limits: $300,000 minimum; $500,000-1,000,000 better

5. Additional Living Expenses

Pays: Your temporary housing if your condo is uninhabitable

Covers:

• Hotel or rental costs

• Restaurant meals

• Storage

• Other necessary expenses

Typical coverage: 12-24 months up to policy limits

6. Improvements and Betterments

Covers: Upgrades you've made beyond original construction

Examples:

• Custom kitchen with granite countertops and upgraded cabinets

• Hardwood flooring replacing original carpet

• Custom bathroom renovation

• Built-in entertainment center

• Upgraded lighting fixtures

Document all improvements with photos and receipts for claims.

How Much Condo Insurance Costs

Average Costs in Orange County

Typical HO-6 premiums:

• $300-800 per year

• $25-65 per month

Much less expensive than homeowners insurance because you're not insuring the building structure.

Factors affecting cost:

• Coverage amounts

• Deductible chosen

• Unit location and floor

• Building age and construction

• Claims history

• Your credit score

• Security features

Condo vs. Homeowners Insurance Cost

Why HO-6 costs less:

• Smaller coverage amount (no building structure)

• Less risk (HOA maintains property)

• Shared liability risk with HOA

Example comparison:

• Single-family home (HO-3): $1,500-2,500/year

• Condo (HO-6): $300-800/year

What Condo Insurance Doesn't Cover

Common Exclusions

Not covered by HO-6:

• Building exterior (HOA's responsibility)

• Common areas (HOA's responsibility)

• Flood damage (need separate flood insurance)

• Earthquake damage (need separate earthquake insurance)

• HOA assessments for maintenance or improvements (only loss assessments from insured damage)

Special Considerations

Short-term rentals (Airbnb):

• Standard HO-6 typically excludes

• Need short-term rental endorsement or separate policy

Home business:

• Limited or no coverage

• Need home business endorsement or separate business policy

High-value items:

• Standard limits apply (jewelry $1,500-2,500)

• Schedule valuable items separately

How to Get the Right Condo Insurance

Step 1: Get Copy of HOA Master Policy

Request from your HOA:

• Full master policy

• Declarations page showing coverage amounts

• Type of coverage (bare walls-in, all-in, single entity)

Understanding HOA coverage is crucial to getting right personal coverage.

Step 2: Calculate Coverage Needs

Interior improvements: Calculate cost to replace upgrades you've made

Personal property: Inventory belongings and estimate replacement cost

Liability: Determine appropriate protection based on assets

Loss assessment: Choose amount that protects you from major assessments

Step 3: Shop Multiple Carriers

Work with independent agent:

• We review your HOA master policy

• We calculate appropriate coverage

• We shop multiple carriers

• We explain exactly what's covered

Bundling savings: Combine HO-6 with auto insurance for 15-25% discount on both!

Step 4: Review and Purchase

Before finalizing:

• Confirm coverage coordinates with HOA master policy

• Understand deductible

• Verify improvement coverage is adequate

• Ensure liability limits protect your assets

Special Situations for Condo Owners

Condo Rental Property

If you rent out your condo:

• Standard HO-6 doesn't cover

• Need dwelling fire policy (DP-3) for rental condos

• Includes loss of rental income

• Higher liability limits recommended

Learn about landlord insurance →

Vacation Condo

If condo is second home:

• Standard HO-6 works

• May have different rates

• Consider increasing coverage for less frequent occupancy

New Construction Condo

During construction:

• Builder's risk insurance covers (builder's responsibility)

After closing:

• Get HO-6 immediately

• Often required at closing

• Don't wait to purchase

Common Condo Insurance Mistakes

❌ Assuming HOA Insurance Covers Everything

Your HOA master policy doesn't cover:

• Your belongings

• Your improvements

• Your liability

• Loss assessment

Always get HO-6 policy.

❌ Not Reviewing HOA Master Policy

You can't get proper coverage without understanding what HOA master policy covers.

Request and review HOA master policy before buying insurance.

❌ Under-Insuring Improvements

If you've renovated with $50,000 in upgrades and only have $20,000 interior coverage, you're $30,000 short after a total loss.

Document and insure all improvements.

❌ Skipping Loss Assessment Coverage

HOA assessments can be substantial.

Loss assessment coverage is inexpensive ($50-100/year for $50,000 coverage) and provides crucial protection.

Get Expert Condo Insurance Guidance

Condo insurance requires understanding the interplay between HOA master policies and personal coverage. We help you get it right.

How Pinoy General Insurance Services helps condo owners:

✅ HOA policy review – We analyze your HOA master policy
✅ Coverage coordination – We ensure no gaps between HOA and personal coverage
✅ Multiple quotes – We shop several carriers for best rates
✅ Bundle savings – Combine with auto for big discounts
✅ Improvement coverage – We ensure upgrades are protected

📞 Call us today: (562) 402 - 1737
📧 Email: info@pinoygeneralinsurance.com

Own a condo in Cerritos or Orange County? Get a free HO-6 insurance quote today.