If you own a condo, you'll need an HO-6 condo insurance policy to cover damage or loss to your belongings, liability expenses after an accident, and any damage to your individual unit that isn't covered under your condo association’s master policy.
While master policies often vary by association, they typically cover everything outside the walls of each individual condo unit, including the building itself and guest injuries in common areas. To figure out how much HO-6 insurance you need, you'll want to first understand what your condo association's policy does and doesn't cover.
What is HO-6 insurance?
HO-6 insurance is another name for condo insurance, protecting your belongings, liability costs if you're personally responsible for an injury or property damage, and other expenses that come with being a condo owner.
While condo insurance coverages appear similar to those in HO-3 or HO-5 homeowners insurance policies, they differ in terms of coverage for the dwelling. That's because when you own a condo, the building's master policy covers damage to the building itself and usually extends some structural coverage to the individual units. An HO-6 form gives insurers the flexibility to tailor its dwelling coverage to condo owners based on their specific needs.
What does HO-6 condo insurance cover?
Most HO-6 policies include six main coverages for your condo unit, belongings, temporary living expenses, liability, and loss assessments. Here's a look at how each condo insurance coverage works and how much of each you need.
What it covers
The condo unit itself, including walls, fixtures, and built-in appliances
The unit's rebuild cost
Your personal belongings inside the condo unit and anywhere else in the world
The replacement cost of your belongings
Additional living expenses while your home is being repaired
Usually a percentage of your personal property or dwelling limit
Optional coverage if you live in a condominium where unit owners are financially responsible for a shared loss, as long as the loss is covered
$1,000 to $50,000
Legal and medical bills if you're legally responsible for someone's injury or damage to someone's property
$100,000 to $500,000
Minor injuries to guests
$1,000 to $5,000
What does the condo association's master policy cover?
How much HO-6 insurance you need depends on the level of coverage in your condominium building’s master policy. So you’ll generally want to find out how the interior structure of your condo is covered by the condo association's policy prior to setting up your own.
There are three 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.
Single entity coverage: Single entity coverage protects everything that a bare walls policy covers, but includes coverage for fixtures, like countertops, sinks, and built-in appliances. It typically doesn’t include coverage for alterations.
All-in coverage: This is the most comprehensive type of coverage, and if your building has this type of master policy you likely don’t need to add any dwelling coverage to your condo insurance policy. All-in master policies cover the entire interior structure of the condo, including fixtures, appliances, and alterations.
What type of damage does an HO-6 policy cover?
Your HO-6 insurance 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
Windstorm or hail
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
What is loss assessment coverage in an HO-6 policy?
Loss assessment coverage is additional coverage that you can add to your condo insurance policy. If there’s damage to a common area, and the cost of repairs exceeds the master policy coverage limits, your HOA may split the remaining costs amongst members. Loss assessment coverage is designed to cover those costs.
With loss assessment coverage, you’re protected in three distinct ways. You’re protected from:
1. Building property damage
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.
2. Liability assessments
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.
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.
3. Master policy deductible assessments
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.
Is HO-6 condo insurance required?
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.