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An HO-6 condo policy costs about $531 a year on average, while an HO-3 homeowners policy costs about $2,147 a year, according to ValuePenguin’s 2026 analysis. The gap is about $1,616 a year, and it exists for a simple reason: an HO-3 policy covers an entire house, roof to foundation, while an HO-6 policy covers only the inside of your condo unit. The condo association’s master policy covers the building itself, so your HO-6 policy never has to.
HO-6 insurance is condo insurance. HO-3 insurance is standard homeowners insurance for a single family house. The two policies share the same building blocks, dwelling coverage, personal property, liability, and loss of use, but they cover different things, cost very different amounts, and are not interchangeable. Buying the wrong one can leave you uninsured where it matters most, or paying for coverage your association already provides.
What is the difference between HO6 and HO3 insurance?
An HO-3 policy insures a whole house. Its dwelling coverage pays to repair or rebuild the physical structure, including the roof, walls, foundation, and other structures on the property such as a garage or shed. An HO-6 policy insures a condo unit. Its dwelling coverage typically applies only to the interior of the unit and the parts of the structure you are responsible for under your association’s bylaws or the master policy, such as interior walls, built-in cabinets, and flooring. The building exterior, roof, hallways, and common areas are covered by the association’s master policy, which is paid for out of your HOA dues.
The other core difference is how the policies treat perils. An HO-3 policy covers the dwelling on an open perils basis, meaning it covers any damage unless the policy specifically excludes it. An HO-6 policy usually covers the dwelling and personal property on a named perils basis, meaning it covers only the perils listed in the policy, typically fire, lightning, wind, hail, theft, and vandalism. Some insurers offer an open perils endorsement for HO-6 policies, which is worth asking about if you want the broader coverage.
| Feature | HO-3 homeowners | HO-6 condo |
|---|---|---|
| Who it is for | Single family house owners | Condo and co-op unit owners |
| Dwelling coverage | Entire structure, roof to foundation | Unit interior only, per bylaws |
| Other structures | Garage, shed, fence | Not covered, association handles common areas |
| Perils on dwelling | Open perils | Usually named perils |
| Personal property | Named perils | Named perils |
| Loss assessment | Not applicable | Covers special assessments after a covered loss |
| Building exterior | Your policy | Association master policy |
Our guide to your condo master policy vs your HO-6 explains exactly where the master policy ends and your policy begins, which is the boundary that decides most condo claims. If you are still deciding whether you need a condo policy at all, our guide on whether you need homeowners insurance for a condo gives the short answer: yes, in almost every case, and your lender and association will usually require it.
How much does HO6 cost compared to HO3?
Condo insurance costs about a quarter of what homeowners insurance costs, because it covers about a quarter of the property. ValuePenguin’s 2026 analysis puts the average HO-6 premium at $531 a year, or $44 a month, against $2,147 a year, or $179 a month, for an HO-3 policy with $350,000 in dwelling coverage, $100,000 in liability coverage, and a $1,000 deductible. The difference is $1,616 a year. GEICO is one of the cheapest condo insurers in that analysis, at $413 a year on average.
Other datasets tell the same story with different numbers, because they use different years and methods. The National Association of Insurance Commissioners reported an average condo premium of $531 a year against a $1,739 average homeowners premium in its 2025 report, cited by Liberty Mutual. Kin cites more recent NAIC data at $572 a year for condo insurance against $1,569 a year for homeowners. Insurance.com’s data puts the gap wider, at $656 a year for condo insurance against $2,601 a year for homeowners in 2024. The ranking never changes: HO-6 costs far less than HO-3, and the gap runs from roughly $1,000 to roughly $1,950 a year depending on the dataset.
| Source | HO-6 average per year | HO-3 average per year | Gap |
|---|---|---|---|
| ValuePenguin, 2026 | $531 | $2,147 | $1,616 |
| NAIC 2025 report, via Liberty Mutual | $531 | $1,739 | $1,208 |
| NAIC, via Kin | $572 | $1,569 | $997 |
| Insurance.com, 2024 | $656 | $2,601 | $1,945 |
State matters more than the national average. ValuePenguin’s August 2026 data puts the average HO-6 premium at $310 a year in North Dakota, the cheapest state, and $1,084 a year in Florida, the most expensive. A condo owner in Florida pays more than triple what a condo owner in North Dakota pays for the same coverage. Our guide to how much homeowners insurance costs in 2026 shows the same state spread on the HO-3 side, where coastal and storm-prone states run far above the national average.
One cost that trips up first time condo buyers is the HOA dues. Your monthly HOA dues, often a few hundred dollars, include your share of the association’s master policy premium. That is not double coverage. The master policy covers the building and common areas, your HO-6 policy covers your unit interior and belongings, and the two together cost less than an HO-3 policy on a comparable house, because the building risk is spread across every unit in the building.
What does an HO6 policy cover that an HO3 policy does not?
The coverage that exists only on an HO-6 policy is loss assessment coverage. If the association’s master policy pays a claim but the cost exceeds the master policy limits, or the master policy deductible applies, the association can levy a special assessment on unit owners to cover the shortfall. Loss assessment coverage pays your share of that assessment, up to your policy limit, when the assessment follows a covered loss. A typical limit is $1,000 to $5,000, and raising it to $25,000 or $50,000 costs very little. Our guide to loss assessment coverage for condo owners explains how special assessments work and what limit to carry.
HO-6 policies also cover improvements you make to the unit. If you renovate the kitchen or install hardwood floors, the value of those improvements is part of your dwelling coverage, not the master policy’s. The master policy covers the unit as originally built, so an owner who spends $40,000 on a renovation and never updates the HO-6 dwelling limit is underinsured by exactly that amount. Check your bylaws to see whether your association uses a bare walls policy, which covers only the shell, or an all-in policy, which covers the original fixtures too, because that decides how much dwelling coverage your HO-6 policy needs.
What does an HO3 policy cover that an HO6 policy does not?
An HO-3 policy covers the entire structure, and that is the coverage an HO-6 policy never provides. Roof, exterior walls, foundation, detached garage, shed, fence, driveway: all of it sits on the HO-3 dwelling limit. An HO-6 policy covers none of it, because the association owns and insures those parts. A condo owner who buys an HO-3 policy instead of an HO-6 policy is paying to insure a building they do not own, and a homeowner who buys an HO-6 policy instead of an HO-3 policy has no coverage at all for the structure itself.
HO-3 policies also carry higher personal property and liability limits by default, because a house simply holds more. The typical HO-3 policy in ValuePenguin’s pricing carries $350,000 in dwelling coverage and $100,000 in liability coverage. A typical HO-6 policy carries far less dwelling coverage, often $25,000 to $75,000 for the interior, because that is all the interior is worth. Liability limits are similar on both, and $100,000 is the usual starting point, with $300,000 available for a small premium increase.
Neither policy covers flood or earthquake damage. Both require separate policies for those perils. Condo owners need to check whether the association’s master policy includes flood coverage for the building, and whether their own HO-6 policy needs a flood endorsement for belongings and interior finishes. Our guide to condo and townhome flood insurance covers the split between the master policy and your own coverage.
Can you buy the wrong one, and what happens if you do?
Yes, and the consequences are practical, not theoretical. If you own a condo and buy an HO-3 policy, your lender will usually reject it, because the policy insures a structure the association already insures and does not match the property type on the mortgage documents. If you own a house and buy an HO-6 policy, you have no dwelling coverage for the structure, which means a fire or storm that damages the roof and walls is not covered at all. The policy type has to match the property type, and there is no version of the wrong policy that works.
Townhouses sit in the gray area. Some townhouses are condos, owned as a unit within an association, and need HO-6 policies. Others are single family homes with shared walls, owned outright with no association, and need HO-3 policies. The deciding factor is the deed and the association documents, not the shape of the building. If you pay HOA dues and the association carries a master policy, you almost certainly need HO-6. If you own the land and the structure outright, you need HO-3. When in doubt, ask the association for the master policy declarations page and show it to your agent.
How do you pick the right coverage limits for an HO6 policy?
Start with the dwelling limit. Add up the cost to rebuild your unit’s interior to its current condition: flooring, cabinets, countertops, fixtures, appliances, and any improvements you made. A bare walls association means you cover everything inside the drywall. An all-in association means the master policy covers the original fixtures, so you only insure your improvements. Most condo owners land between $25,000 and $75,000 in dwelling coverage, and the premium difference between those limits is small.
Set personal property coverage by walking through the unit and pricing what you own: furniture, electronics, clothing, kitchenware. The standard HO-6 policy covers personal property at actual cash value, which subtracts depreciation, unless you add replacement cost coverage, which pays what it costs to buy the item new. Replacement cost coverage is one of the cheapest upgrades in any property policy and is worth adding on both HO-6 and HO-3 policies.
Set loss assessment coverage at $25,000 or more if your building is older or in a storm-prone state, since a single special assessment after a roof claim can run into five figures per unit. Set liability at $300,000 if you have savings or home equity to protect, since the premium step from $100,000 to $300,000 is usually under $50 a year. And compare at least three carriers, because condo rates vary widely by state: our guide to the best condo insurance companies in 2026 compares the carriers that write HO-6 policies, including GEICO at $413 a year on average.
Key takeaways
An HO-6 policy covers a condo unit’s interior and costs about $531 a year on average. An HO-3 policy covers an entire house and costs about $2,147 a year. The $1,616 gap exists because the condo association’s master policy covers the building, so your HO-6 policy never has to. The one coverage only an HO-6 policy offers is loss assessment, which pays your share of a special assessment after a covered loss. Buy the policy that matches your property type, set the dwelling limit to the cost of rebuilding your interior, and add replacement cost coverage for your belongings.
Frequently asked questions
Is HO6 cheaper than HO3?
Yes. HO-6 condo insurance averages about $531 a year, while HO-3 homeowners insurance averages about $2,147 a year in ValuePenguin’s 2026 analysis. The gap is about $1,616 a year. HO-6 costs less because it covers only the inside of your unit, while the condo association’s master policy covers the building itself.
What is the difference between HO6 and HO3 insurance?
HO-3 insurance covers an entire single family house, including the roof, walls, foundation, and other structures, on an open perils basis. HO-6 insurance covers only the interior of a condo unit, usually on a named perils basis, while the association’s master policy covers the building exterior and common areas. HO-6 also includes loss assessment coverage, which HO-3 does not offer.
Do I need HO6 insurance if my condo association has a master policy?
Yes. The master policy covers the building and common areas, not your unit interior, your belongings, your liability, or your living expenses if you are displaced. Your lender and your association will usually require an HO-6 policy. The master policy and your HO-6 policy are designed to work together, not to replace each other.
What does HO6 insurance cover?
An HO-6 policy covers your unit’s interior and improvements, your personal belongings, your personal liability, additional living expenses if you cannot live in the unit, and loss assessment coverage for special assessments after a covered loss. It does not cover the building exterior, roof, or common areas, which are covered by the association’s master policy. Flood and earthquake damage need separate policies.
How much HO6 dwelling coverage do I need?
Set the dwelling limit to the cost of rebuilding your unit’s interior to its current condition, including flooring, cabinets, countertops, fixtures, and any improvements you made. Most condo owners land between $25,000 and $75,000. Check whether your association uses a bare walls or all-in master policy, because that decides how much of the interior your HO-6 policy has to cover.
Can a townhouse have HO6 or HO3 insurance?
Both. A townhouse that is part of a condo association needs an HO-6 policy, while a townhouse owned outright with no association needs an HO-3 policy. The deciding factor is the deed and the association documents, not the shape of the building. If you pay HOA dues and the association carries a master policy, you need HO-6.
