More on Home Insurance
More on Home Insurance
An HO-6 policy is a type of insurance you get if you own a condo. HO-6 insurance covers structural improvements, your personal belongings, your personal liability, and losses assessed by your condo owners association.
Published June 12, 2020
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An HO-6 policy, also known as condo insurance, is property insurance for condo and co-op owners. An HO-6 contains coverage for your personal belongings, your liability, and special protection for improvements or alterations to the unit.
Your HO-6 should complement your condo association’s master policy. Condo association policies typically cover everything outside the walls of each individual condo unit, including the condominium building itself, and liability expenses if a guest is injured in a common area.
But master policies can vary — some provide “all-in” coverage, meaning they cover the entire structure of your condo. In that case, your HO-6 policy would be mainly for your belongings and personal liability. Other master policies only provide “walls in” coverage, meaning unit owners are responsible for insuring everything from the floors to cabinets to bathroom fixtures.
An HO-6 policy is a form of coverage for condo or co-op owners
The extent of your HO-6 coverage depends on what your building’s master policy already covers
Consider as much as $50,000 in HO-6 loss assessment coverage to ensure you’re financially protected from expensive assessments
The term “HO-6” refers to a form of property insurance intended for condo owners. Several types of coverage offered by insurance companies — like home, renters, and condo insurance — are written by the Insurance Services Office (ISO), an industry-leading statistical and actuarial organization. The standard homeowners insurance forms written by ISO are the HO-3 and HO-5s, the renters insurance form is an HO-4, and the condo owners insurance form is an HO-6.
Read more about the different types of homeowners insurance here.
Here is a look at the coverage usually included in a standard HO-6 condo insurance policy, as well as the reimbursement limits of each coverage component.
|Coverage||What does this coverage do?||What is the insured coverage limit?|
|Section I - Property Coverages|
|Coverage A - Dwelling||Covers alterations or improvements made to the unit. Also covers any structural part of the unit that is your insured responsibility||Replacement cost of the insured property|
|Coverage C - Personal Property||Covers your personal belongings both inside and outside the condo||Actual cash value (optional replacement cost add-on). Coverage limits vary by company.|
|Coverage D - Loss-of-use||Pays for additional living expenses while your home is being repaired||20% of personal property limit|
|Additional Coverages||Additional coverages in a standard policy—like debris removal, loss assessment and credit card forgery protection||Varies by coverage type|
|Section II - Liability Coverages|
|Coverage E - Personal Liability||Pays for legal and medical bills if you're held liable for injury or personal property damage to someone else||$100,000-$500,000|
|Coverage F - Medical Payment To Others||If a guest is injured in your condo, it pays for their medical bills, regardless of who is at fault||$1,000-$5,000|
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The extent of your condo insurance coverage will depend on the level of coverage in your condominium building’s master policy already. You’ll generally want to find out how the interior structure of your condo is covered by the building policy prior to setting up your own. There are two main kinds of master policies that determine how much dwelling coverage you need in your condo policy:
Bare walls coverage - A bare walls policy covers just the structure of the condo, so basically everything behind the condo walls, including the drywall itself, framing, wiring, plumbing, and insulation.
All-in coverage - An all-in coverage protects everything that a bare walls-in policy covers, but includes coverage for fixtures, like countertops, sinks, and built-in appliances. A helpful way to think about all-in coverage is if you can’t take it with you and you didn’t move it in, it’s probably covered. All-in coverage typically doesn’t include coverage for renovations made to the unit. For that, you need supplemental dwelling coverage in your HO-6 condo policy.
Your HO-6 policy will list all of the perils the condo itself and your belongings are protected from. Here’s a look at causes of loss that are covered, and causes of loss that aren’t covered, by a standard HO-6 policy.
|What is covered by condo insurance||What isn't covered by condo insurance|
|Fire or lightning||Flooding|
|Windstorm or hail||Earth movement|
|Riot or civil commotion||Routine wear and tear|
|Weight of snow, ice, or sleet|
|Accidental discharge or overflow of water or steam|
|Sudden and accidental tearing apart, cracking, burning or bulging|
|Freezing of plumbing|
|Sudden and accidental damage from electrical current|
Loss assessment coverage is an additional coverage in both home and condo insurance policies, but it’s especially important for residents of condo associations where property damage to building and community common areas are often assessed out to building residents.
Loss assessment coverage pays your portion of an assessed loss if the damage is also covered by your HO-6 policy. That means if your building's common area is damaged by a fire, your assessment would be covered, but if the common area was damaged by an earthquake, your assessment wouldn’t be covered since earthquake damage isn’t insured by your condo policy.
Loss assessment coverage also may cover liability assessments if your home or condo association is held liable for a guest’s injury and sued beyond the master policy coverage limit.
Most condo insurance policies come with around $1,000 in loss assessment coverage, but you can often increase your limit up to around $50,000. If you’re a resident of a condo association, consider maxing out your loss assessment coverage in the event you’re assessed an exorbitant amount.
With loss assessment coverage, you’re protected in three distinct ways. You’re covered from:
If you’re assessed for covered damages to common areas that the condo association is responsible for, loss assessment coverage will reimburse your portion of the assessment. You’re typically only assessed for damages when the master policy coverage has reached its limit.
A loss assessment coverage endorsement can also help pay your portion of liability damages if your condo association is held legally responsible for a guest’s injury in a building or common area. Similar to property coverage, your HOA usually only assesses liability losses when the master policy coverage has reached its limit.
If someone is badly injured in the community pool area and the victim’s family sues for $1.2 million, if the master policy limit is $1 million, your association may assess $200,000 to association members. If the condo association has 25 members, $8,000 would be assessed to each unit.
Some condo associations may even assess the master policy deductible out to members after a loss. If you’re assessed a portion of the deductible, your loss assessment coverage could also help pay for your portion of the deductible. Master policy deductible assessments are particularly common in condo associations that opt for higher deductibles, like $25,000.
Residential insurance coverage — whether for home or condo owners — isn’t required by law, but many mortgage lenders will require condo owners to get enough coverage for the structure of the condo to protect their investment.
If your building master policy is bare walls-in, your lender will likely require enough coverage to fully replace the interior structure of the condo in the event that it’s damaged or destroyed. If your building policy has all-in coverage, you’ll likely only need enough condo insurance to cover improvements, alterations, or renovations.
Pat Howard is a homeowners insurance editor at Policygenius in New York City. He has written extensively about home insurance cost, coverage, and companies since 2018, and his insights have been featured on Investopedia, Lifehacker, MSN, Zola, HerMoney, and Property Casualty 360.
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