Key Takeaways
- HO-6 insurance covers interior, personal items, and liability in condos.
- Lenders typically require HO-6 insurance for condo mortgage approval.
- Annual premiums for HO-6 insurance usually cost several hundred dollars.
- HO-6 complements your HOA's master policy by covering your unit.
Article Summary
HO-6 Insurance is property insurance designed for condominium owners and cooperative unit residents.
HO-6 Insurance: Explained in Plain English
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 guests, family members, or other individuals are injured while in a condo unit. It also covers accidental damage to someone else's property caused by the unit owner. Liability protection is sometimes referred to as 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 the unit owner's share of the cost.
Types of HO-6 Insurance Coverage
| Coverage Type | What It Protects |
|---|---|
| Personal Property | Belongings like furniture, electronics, and clothing |
| Interior Dwelling | Interior of the unit: walls, floors, ceilings, built-ins |
| Liability Protection | Injuries to guests or damage to others' property |
| Loss Assessment | Special assessments from the condo association |
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 are 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 the 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. The adjuster takes note of the water-damaged hardwood floors, the ruined area rug, the soaked sofa, and other affected personal items, and writes a check to the homeowner for repairs minus the deductible.
Common Questions About HO-6 Insurance
Get answers to frequently asked questions about HO-6 insurance coverage, requirements, and how it works with your condo association's master policy.
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 recommended for comprehensive 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, such as personal property and interior components of the unit.
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 are comfortable with. Consulting with an insurance agent can also be helpful, especially if you store valuables like jewels in your condo.
