Home insurance vs. cooperative insurance vs. condominium insurance
Advertiser Disclosure

Home insurance vs. cooperative insurance vs. condominium insurance

May 17, 2023
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here's how we make money.

If you live in a cooperative or condominium, navigating the home insurance market can be difficult. Cooperative and condo insurance may not be as straightforward as standard home insurance, but understanding some key differences can help simplify the buying process. The editors of Empire Finance Pro examine the similarities and differences between these types of insurance to help you insure your property.

Home and co-op insurance

When you buy a house or apartment, you own the property and the deed proves it. In the case of a co-op, you are not the owner, but a shareholder in the company that owns the building. A cooperative is a housing cooperative owned by a corporation that allows people to buy shares in exchange for access to the housing and facilities on the property. A cooperative is more like a lease, where you are the tenant and the building owner is the landlord. The shares do not translate into real property, as in the case of owning a house or apartment. They are treated as personal property.

A normal home insurance policy covers the entire structure of the home and personal property. Since you do not own the building when you live in a cooperative, you do not have the benefit or need for traditional home insurance. With home insurance in a cooperative, the policy covers only the building unit you own, usually from the foundation up. The master policy purchased by the cooperative covers the exterior of the building and the exterior of your unit, including common areas and hallways. Not all master policies are the same. Therefore, it may be important to review the master policy to see what parts of the structure are covered so that you can purchase insurance from the cooperative to cover what you are responsible for.

Homeowners insurance and condominium insurance

Buying a condominium is more like buying a house than a cooperative. When you buy a condominium, you are the owner and probably need condominium insurance to properly insure it. However, condominium insurance is more like that of a cooperative than that of a house because you are responsible for insuring only your unit, not the entire building. This is because the condominium corporation's master policy covers the common areas and the building structure, as does a cooperative's master policy. The homeowner's policy of a cooperative or condominium entity generally includes liability coverage and additional living expenses, as does the homeowner's policy.

Co-owners and shareholders of a cooperative may consider adding optional loss assessment coverage. Homeowners living in a homeowners association may also consider this coverage. This coverage can help you pay in the event of a covered loss, which is a fee applied to all units to cover the deductible and other amounts paid by the association. For example, a large tree that fell during a wind storm damaged parts of the common areas, including the roof of a building. All owners could be charged the same amount to cover the $15,000 deductible on the master policy.

What do home, cooperative and condominium policies cover?

Most HO-3 policies include a home warranty, which covers the structure of the home, including the roof, windows and walls. These policies also cover additional structures on the property, as well as liability, personal property, medical expenses for guests, and loss of use (additional hospitalization costs).

Insurance policies for condominiums and cooperatives work slightly differently. In most cases, a master policy covers the facilities, while each resident's personal policies generally cover the other, more individual types of coverage listed above. Although the types of coverage and maximum amounts may vary by policy type and insurer, the table below summarizes what is generally covered by each type of insurance policy.

Home insurance
Home insurance
X
Cooperative insurance
Condominium insurance
Coverage of other facilities
Home insurance
X
Cooperative insurance
Condominium insurance
Liability coverage
Home insurance
X
Cooperative insurance
X
Condominium insurance
X
Personal property coverage
Home insurance
X
Cooperative insurance
X
Condominium insurance
X
Coverage of guests' medical expenses
Home insurance
X
Cooperative insurance
X
Condominium insurance
X
Loss of use coverage
Home insurance
X
Cooperative insurance
X
Condominium insurance
X
Home insurance
Cooperative insurance
Condominium insurance
Home insurance
X
Coverage of other facilities
X
Liability coverage
X
X
X
Personal property coverage
X
X
X
Coverage of guests' medical expenses
X
X
X
Loss of use coverage
X
X
X

Is condominium insurance more expensive than home insurance?

The insurance policy premium takes into account a number of costs, including level of coverage, dwelling, location, and personal price factors. Standard home insurance policies include the cost of homeowner's coverage, but this coverage is usually included in the master policy of a condominium or cooperative. This difference in coverage generally reduces the cost of a condominium or cooperative policy compared to a policy for homeowners in the same area.

Although a condominium or cooperative policy generally does not include coverage for homeowners, people living in a building with other units may incur additional costs, such as cooperative or condominium association fees. These fees are generally used to pay for, among other things, the cooperative or condominium association's primary insurance policy.

Ultimately, whether home, condo, or co-op insurance is more expensive depends on the type of property you live in, where you live, and your own pricing factors. To give an idea of the average cost of home insurance in 2023, the average premium is $1,428 per year for $250,000 of coverage.

Frequently asked questions.

What is the best home insurance company?

The best home insurance company probably depends on your insurance needs and preferences. The best insurance company for a homeowner who wants low rates and lots of discounts will probably differ from the best company for a homeowner who wants excellent customer service or solid coverage. Narrowing down companies based on your personal criteria and comparing quotes to see which company might offer you the cheapest coverage can help you identify the best home insurance company for you.

How much does home insurance cost?

The average cost of home insurance is $1,428 per year for $250,000 of coverage. Home insurance costs vary depending on location, coverage needs, type of home, and personal characteristics, so your average rates are likely to be very different from this average.

Is cooperative insurance mandatory?

There is no federal or state law requiring cooperatives to carry mandatory insurance. However, many lending institutions and cooperative associations do require it. If you own a condominium or cooperative, most insurance professionals recommend that you purchase supplemental insurance, in addition to your main policy, to provide financial protection for your personal assets and to fill any gaps in your main policy.

Destiny Richardson
Written by
Destiny Richardson
Loans Credit, Cards
Destiny Richardson is a seasoned professional with 10+ years of global experience in the field of Investment Banking, Mergers and Acquisitions, and CFO. My area of expertise is Finance, Financial modelling, Fundraising, Investment Thesis, Mergers & Acquisitions, Market Research & Strategy work for startups as well as mid size companies. Destiny Richardson is a qualified Chartered Accountant (equivalent to CPA) and a graduate in commerce also hold Masters degree - MBA from leading universities in Asia / Europe. Due to my nature of work and love for travelling, I have been to more than 20+ countries.