Condo owners might feel they don't need insurance but that is the furthest thing from the truth. Everyone who owns a condo needs condo insurance, just like homeowners. Whether someone owns of single-family home or one of 100 condos in a high-rise, they face similar risks.
Most condo owners already have an HO-6 policy because their mortgage lender requires them to have one. The majority of homeowners are in the same circumstance. Renters on the other hand are, generally, not required to have insurance so only about 40% of tenants purchase a policy. They wrongfully believe their risk, especially in a large apartment complex, is lower and that they don't need a policy.
A condo owner - without a mortgage lender requiring them to purchase a policy - might try to justify not having insurance the same way renters do and that is a mistake.
Like homeowners insurance, condo insurance policies cover the unit (or co-op), personal property, liability costs, and additional living expenses. The only difference between the policies is that condo insurance doesn't cover an entire condo building, only the unit itself.
A condo building (whether it is a two-unit structure or one with hundreds) is covered under a "master policy" purchased by the condo board or association. Unit owners pay condo fees to cover the costs of such policies for the benefit of everyone, to ensure the communal areas and employees are insured. Owners are not responsible for things such as the building exterior (including the roof), entrances, hallways, gyms, parking lots, or a pool.
Having said that, condo owners need insurance to cover their unit itself and other potentially life-altering financial costs.
Unit owners shouldn't have a sense of security simply because their residence is a small part of a large building. If anything, the opposite might be true. No matter how careful an owner is, their apartment might only be as safe from a fire or water damage as their adjacent neighbor's.
A condo master policy really doesn't cover anything an owner can see inside their unit - interior walls, flooring or permanent fixtures. Owners need condo insurance to cover those things.
The differences between condo and homeowners insurance essentially stop there. Condo owners need insurance to cover their personal property inside and outside of their unit. Even in a small space, people tend to own more valuables than they think.
Having liability protection is something else condo owners probably can't afford to be without in the event they are sued. If an owner is found liable for damaging another person's home, or an incident that results in medical costs, the expenses could be tremendously high.
There's always a chance something might prevent a condo owner from entering their unit, too. Whether it is damaged in a fire, or some incident in their building prevents them from entering, condo insurance can reimburse them for additional living expenses they incur. Depending on where someone lives, these costs might be very high. Hotels and eating out in most major cities is typically expensive, especially over a long period of time.