Owning a condo means sharing walls, roofs and common spaces with other residents, but that doesn’t mean your homeowners’ association’s insurance policy has the entire building covered. An HO-6 policy is specifically for condo and co-op owners, designed to protect the parts of your property that fall outside of your condo association’s master policy.
Understanding how condo insurance works, what it covers and where gaps can appear is essential for any unit owner who wants to protect their investment and personal belongings.
What is an HO-6 insurance policy?
An HO-6 policy, often called the unit-owners form or condo insurance, is a standardized homeowners’ insurance policy that’s designed specifically for people who own a condo or co-op unit. With these types of units, insurance responsibilities are usually divided between the condo association and the unit owner. The association’s master policy typically covers the building’s exterior and common areas, while an HO-6 policy helps protect the portions of the unit that are the owner’s responsibility.
HO-6 insurance typically includes coverage for your unit’s interior, personal belongings, personal liability and additional living expenses after a covered loss. Depending on the property association’s governing documents and master policy, it may also help cover fixtures, flooring, cabinetry, built-in features and improvements made to the unit.
Rather than replacing the association’s insurance, an HO-6 policy is designed to complement it by helping protect the property and financial responsibilities that specifically belong to the condo owner.
How HO-6 Works with Your HOA Master Policy
Every condo association carries a master policy that covers common areas, the building’s exterior and certain structural components. However, not all master policies provide the same level of coverage. The type of policy your HOA maintains will help to determine how much protection your HO-6 policy needs to provide.
For example, some HOA policies provide broad, “all-in” coverage that includes some in-unit fixtures and upgrades, while others provide “bare walls” or “studs-out” coverage that only covers the building structure and common areas, with coverage stopping at the interior side of your unit’s walls.
It’s also important to keep in mind that HOA master policy deductibles can be substantial, especially in areas that are prone to hurricanes, wildfires or other natural disasters. If the association assesses part of that deductible to unit owners after a covered loss, your HO-6 policy’s loss assessment coverage could help pay your share.
Coverage Components of HO-6 Policies
HO-6 policies generally provide several distinct coverage types. Dwelling and personal property coverage typically operates on a named perils basis, meaning the policy covers damage caused by specific perils listed in the contract, such as fire, theft and vandalism.
Dwelling Coverage
Dwelling coverage protects the interior portions of your condo that you’re responsible for, such as walls, flooring, ceilings, built-in cabinets, fixtures and covered improvements or renovations. Your dwelling limit should reflect the responsibilities assigned by your association’s master policy. Replacement cost coverage is often recommended because it helps pay for repair or rebuild costs without deducting depreciation.
Personal Property
Personal property coverage helps pay to repair or replace belongings like furniture, clothing, electronics and household items that are damaged by a covered loss. Most policies also provide limited off-premises coverage for belongings away from home. Coverage can be purchased on an actual cash value or replacement cost basis, and valuable items like jewelry or fine art may require additional endorsements.
Loss of Use
If a covered loss makes your condo temporarily uninhabitable, loss of use coverage helps pay for reasonable additional living expenses like hotel stays, meals and other temporary costs that you incur to help maintain your normal standard of living. Coverage is generally limited to covered losses and is often based on a percentage of your policy limits.
Personal Liability
Personal liability coverage helps protect you if you’re legally responsible for someone else’s bodily injury or property damage. It can help pay legal expenses, settlements and judgments up to your policy limits. Many condo owners choose limits that are higher than the minimum, particularly if they have significant assets to protect.
Medical Payments to Others
Medical payments coverage helps to pay for minor medical expenses if a guest is injured in your condo, regardless of fault. It can help resolve smaller incidents without requiring a liability claim or lawsuit.
Loss Assessment Coverage
Loss assessment coverage helps pay your share of certain costs when your condo association issues a special assessment after a covered loss, such as when the master policy’s deductible is high or its limits are exhausted. Standard homeowners’ policies often include relatively low limits, so many condo owners choose to increase this coverage.
Common HO-6 Exclusions
Understanding what a condo insurance policy does not cover is just as important as understanding what it does. Standard exclusions in HO-6 policies include, but aren’t limited to:
- Flood Damage: Standard condo insurance does not cover flooding. Condo owners in flood-prone areas need a separate flood insurance policy, available through the National Flood Insurance Program (NFIP) or private insurers.
- Earthquake Damage: Seismic events require a separate earthquake policy or endorsement in most states.
- Routine Wear and Tear: Damage resulting from lack of maintenance, gradual deterioration or neglect is excluded. The line between what the HOA maintains and what falls to the individual owner can sometimes create confusion, so consult your insurance advisor if you have questions about what’s covered by your policy.
- Intentional Damage: Losses caused by deliberate acts of the policyholder are not covered.
Some of these risks, such as flood and earthquake, may also be excluded from the HOA’s master policy, meaning neither the association’s coverage nor a standard HO-6 policy would respond. Identifying these exposures early and exploring additional coverage options through endorsements or a separate policy can help reduce unprotected risk.
How HO-6 Compares to Other Policy Types
HO-6 policies occupy a specific position within the homeowners’ insurance landscape. Here’s how they compare to a few other common home insurance policies.
HO-6 vs. HO-3
An HO-3 policy is designed for owners of single-family homes. It insures the home as a whole, including the dwelling and other structures on the property, because the homeowner is responsible for the entire building.
Because condo associations insure much of the building, an HO-6 focuses on the portions of the unit the owner is responsible for. As a result, it often costs less than an HO-3 policy.
HO-6 vs. Renters’ Insurance
Renters’ insurance (HO-4) is designed for tenants who do not own the property they live in. It typically covers personal belongings, personal liability and additional living expenses after a covered loss, but it does not provide any dwelling coverage since renters have no ownership interest in their unit or building.
Is your condo properly protected?
Choosing the right insurance policy starts with understanding your coverage responsibilities as a condo owner. From there, working with your insurance advisor to select appropriate limits, coverage terms and deductibles can help ensure your HO-6 policy provides the protection you need.
Higginbotham works closely with condo owners to evaluate their personal insurance needs, review HOA documents and design coverage that aligns with their situation. Connect with a personal insurance specialist today to discuss your condo coverage and get a personalized evaluation of your protection needs.
