What is HO-6 Insurance?

HO-6 Insurance is a property insurance designed for condominium owners and cooperative unit residents.

A Longer Definition: HO-6 Insurance

HO-6 Insurance, commonly known as “condo insurance” or “co-op insurance,” is homeowners insurance for people who own units in a condominium or a cooperative building.

An HO-6 policy fills the insurance coverage gap left by a condominium association’s master condo policy which typically covers the building’s exterior and common areas. By contrast, HO-6 focuses on the unit’s interior and the owner’s personal property.

Key components of HO-6 Insurance include:

Personal Property Coverage

Personal property coverage protects a condo owner’s belongings, such as furniture, electronics, and clothing, against theft, fire, water damage, and other covered perils.

Interior Dwelling Coverage

Interior Dwelling Coverage covers the interior of a condo unit from damage, including walls, floors, and ceilings. When the condo association’s master policy is “bare walls-in”, Interior Dwelling Coverage becomes especially important.

Liability Protection

Liability Protection provides coverage for when friends, family members, or guests get injured while in a condo unit, or when the unit owner accidentally damages someone else’s property. Liability protection is sometimes called Personal Liability Insurance or Umbrella Insurance.

Loss Assessment Coverage

When the condo association levies a special assessment on unit owners because a covered claim exceeded the master condo policy limits, Loss Assessment Coverage helps pay your share of the cost.

HO-6 Insurance: A Real World Example

Imagine a first-time home buyer who recently moved into a condominium unit on the ground floor of a well-maintained building.

One weekend, while they’re away, the upstairs neighbor forgets to turn off their kitchen faucet. The water overflows, unnoticed for hours. Eventually, the overflow seeps through the floor into the homeowner’s unit below, warping their hardwood floors, damaging expensive area rugs, and ruining a sofa.

The first-time home buyer comes home to find their unit damaged. They report the incident to the condominium association, which confirms that the building’s master insurance policy will pay for structural damage and repairs to the ceiling and walls but not to personal belongings or the interior furnishings of your unit.

The homeowner contacts their insurance provider and files a claim on their HO-6 policy. The next day, an insurance adjuster visits to assess the damage. They take note of the water-damaged hardwood floors, the ruined area rug, the soaked sofa, and other affected personal items; and, write a check to the homeowner for repairs minus the deductible.

Common Questions About HO-6 Insurance

What does HO-6 Insurance cover?

HO-6 Insurance typically covers personal property, interior damages, liability, and sometimes additional living expenses if the unit becomes uninhabitable.

Is HO-6 Insurance required for condo owners?

While not always legally required, many mortgage lenders require condo owners to have HO-6 Insurance. It’s a recommended policy for full insurance protection.

How does HO-6 Insurance complement the condo association’s master policy?

HO-6 insurance covers aspects not included in the master policy, like personal property and interior unit components.

Does HO-6 Insurance cover improvements I make to my unit?

Yes, it often covers interior improvements, which is especially important if the master policy is of the bare walls-in type.

How do I determine how much HO-6 Insurance I need?

Assess the value of your personal property and the cost to repair or replace interior elements of your unit, then consider the liability coverage you’re comfortable with. Consulting with an insurance agent can also be helpful – especially if you store jewels in your condo.