HO-6 Insurance: Understanding Condo Insurance

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By Clever Real Estate Updated October 21, 2021


A condo building against a blue sky. Condos require HO-6 insurance!

When you own a home, you need insurance for it. Simple as that.

You never know when bad things will happen, so you never want to be caught without it. Those in the real estate industry often refer to homeowner’s insure as "HO." There are different categories of insurance for different kinds of homes.

If you own a condo, the kind of insurance you need to purchase to keep it safe is called HO-6 insurance.

What is HO-6 insurance?

HO-6 insurance is a special kind of insurance specifically formatted to cover the needs of people who own condos.

HO-6 insurance is specific to condos because condos are a very special kind of home. If you own a condo, you only technically own the inside of the property—not its frame or the outside walls. Because of this, other types of insurance will not fit your needs or be able to cover the specific problems that may arise.

Why is HO-6 insurance required?

Typically, your landlord or homeowner’s association will have a master insurance policy. This policy covers the outside of your individual unit, like the actual structure and the common areas of the building. Common areas would be things like the hallways, the lobby, or the communal parking garage.

Although your landlord owns everything outside of your condo, anything inside your condo unit is your personal property. Therefore, if you do not take out HO-6 insurance, it would be completely uninsured and liable to damage if something bad were to happen.

What does HO-6 insurance cover?

Your HO-6 insurance covers interior damage to your unit.

Things like water damage, mold, and burglary can usually be included in the policy. The HO-6 policy also covers any improvements, additions, and alterations that you have made to your personal property.

This would include items like repainted walls, new light fixtures, or appliances. This is an excellent feature because it means you can upgrade your home without worrying that your investment will be lost to a disaster.

HO-6 Insurance Benefits

HO-6 insurance is designed to coordinate its coverage with your condominium’s master policy. While, as mentioned, the association’s master policy provides protection for the outside and structure of your home, the HO-6 insurance is what will actually protect your personal property.

Its main benefits are as follows below:

  • Coverage for damage to personal property
  • Personal liability coverage
  • Interior walls and floor coverings coverage
  • Coverage for improvements or upgrades (most master insurance policies only cover the original condition and value of the unit).

It is important to understand that HO-6 insurance provides coverage for upgrades to your condo. That means it does not just cover the original value. If you spend $10,000 upgrading your master bathroom only to have a storm ruin it, your insurance covers your entire investment of $10,000—not just the value it adds to the condo. That's a big plus!

Additional Benefits of HO-6 Insurance

  • Small deductible and fairly inexpensive payments
  • Deductible gap insurance

In many situations, HO-6 insurance provides deductible gap coverage.

This means that it can fill in the gap between what you can afford and the master insurance policy’s deductible. Condo associations have recently been cutting costs by implementing deductibles from $10,000 even up to $50,000. Sometimes there are even documents stating that the unit owner is responsible for coverage for anything below the deductible—which isn’t true at all.

HO-6 insurance will protect you if you become trapped in this unfortunate situation.

The final benefit of HO-6 insurance is loss assessment coverage.

Your policy can provide assessments applied to an individual unit due to a direct loss to the condominium. The unit owner’s individual policy must cover the loss.

The loss cannot be levied by a governmental agency. It also not be related to earthquake damage. A standard HO-6 policy typically includes up to $1,000 in loss assessment coverage. If you want more coverage, it is usually not too expensive to add it on to your policy.

What does HO-6 insurance not cover?

Standard HO-6 insurance has a coverage limit. It might not cover the replacement cost for unit owners on things like jewelry, fine art, or fancy computer equipment. While it varies from state to state, you might need extra coverage for earthquakes, floods, or windstorms.

Be sure to talk to your insurance agent about the specific costs for your area.

HO-6 insurance also does not cover the actual structure of your condo, nor does it cover common areas like hallways, lobbies, or parking garages. Your condo’s master insurance policy covers these areas.

HO-6 Insurance Costs

Standard HO-6 coverage doesn't vary much from one company to the next. However, rates and customer service do. Because of this, it is very important to shop around for home insurance. Ask for insurance coverage quotes from at least three different companies before you commit to purchasing a policy.

The current national average condo insurance cost is roughly $389. For this amount, you have access to $60,000 in personal property coverage. You would have a $1,000 deductible (we told you they were typically low!). You would also have $300,000 in liability protection. These are the limits of a typical policy.

How to Buy HO-6 Insurance

You can purchase HO-6 from any trusted insurance company. As mentioned, be sure to shop around before committing to a policy. Read online reviews, meet with agents in person, and really dive deep to understand the dynamics of the policy and insurance firm you choose to purchase from.

What to Look for in a Good HO-6 Policy

A good HO-6 policy should be inexpensive but offer extensive coverage.

The Washington Post advises asking your personal insurance agent to speak to the condo property manager to find out what the master policy already covers.

When searching for the best policy for you, be sure to keep a list of the benefits of HO-6 insurance handy. The policy that you decide to purchase needs to include each one of them for it to be a worthwhile purchase.

What kind of coverage do condo owners need?

Condo owners looking to purchase HO-6 insurance should purchase full coverage policies. As mentioned, they are not expensive and will protect you in the event of an emergency.

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