What Does an HO6 Condo Insurance Policy Cover?

An HO6 insurance policy is a specialized type of homeowners insurance for condominium or cooperative unit owners. It serves as a personal safety net, complementing the master insurance policy typically held by the condominium or homeowners association (HOA). Its primary purpose is to cover the unit owner’s interests not addressed by the master policy. This includes protecting the unit’s interior, personal belongings, and providing liability coverage. Unlike traditional homeowners insurance that covers an entire structure, an HO6 policy focuses on the unique aspects of condo ownership, where shared responsibilities exist with the association.

Coverage for Your Personal Belongings and Unit Interior

A core component of an HO6 policy is coverage for the policyholder’s personal property. This includes furniture, clothing, electronics, and other movable goods within the unit. If these personal belongings are damaged or stolen due to a covered peril, the policy helps to repair or replace them, often up to specified limits.

Beyond personal items, an HO6 policy also covers structural elements and improvements within the unit not typically covered by the building’s master policy. This is referred to as “walls-in” or “studs-in” coverage. It encompasses interior walls, floors, ceilings, fixtures like cabinets and countertops, and built-in appliances. This coverage is crucial because while the master policy usually covers the building’s exterior and common areas, the HO6 policy covers what lies inside the unit, from the drywall inward.

Personal Liability and Temporary Living Costs

An HO6 policy extends protection to include personal liability coverage. This protects the policyholder from financial responsibility if they accidentally cause bodily injury or property damage to others, whether the incident occurs inside or outside their unit. This coverage can help with legal defense costs and any judgments awarded, with typical limits ranging from $100,000 to $500,000.

These policies often include coverage for medical payments to others. This provides a smaller amount of coverage, typically ranging from $1,000 to $5,000, for minor medical expenses if a guest is injured on the policyholder’s property, regardless of fault.

Another aspect is “loss of use” or “additional living expenses” coverage. If the condo unit becomes uninhabitable due to a covered peril, such as a fire or significant water damage, this coverage helps with temporary housing and increased living costs. These expenses can include hotel stays, meals, and other necessary expenditures incurred while the unit is being repaired, often for a period of 12 to 24 months or up to a percentage of the dwelling coverage.

Standard Exclusions and Available Additions

While an HO6 policy provides extensive coverage, certain perils are generally not covered by a standard policy. Common exclusions include damage from floods and earthquakes, which typically require separate insurance policies or specific endorsements. Damage resulting from mold is also often excluded unless it is a direct result of a sudden and accidental covered event.

Standard policies usually do not cover damage caused by wear and tear, gradual deterioration, neglect, or intentional acts by the policyholder. Issues such as pest infestations are also typically excluded.

To enhance protection, policyholders can add optional coverages or endorsements to their HO6 policy. Examples include coverage for water backup from sewers or drains, which protects against damage caused by such incidents. Increased limits for valuable personal property like jewelry, art, or collectibles can be added, as these items often have sub-limits under standard policies. Loss assessment coverage is another valuable addition, which helps pay the policyholder’s share of a special assessment levied by the HOA if the master policy’s limits are exceeded for damage to common areas.

Distinguishing Your Policy from the Master Policy

Understanding the distinction between an HO6 policy and the homeowners association’s master insurance policy is fundamental for condo owners. The master policy typically covers the building’s common areas, such as hallways, roofs, shared utilities, and the exterior structure of the building itself. It may also cover original structural elements within the units.

The HO6 policy is designed to bridge the gap, covering what the master policy does not, primarily focusing on the unit owner’s interior space and personal property. The specific scope of an HO6 policy is heavily influenced by the type of master policy the HOA carries. There are generally three types of master policies: “bare walls-in,” “single entity,” and “all-in.”

A “bare walls-in” master policy covers only the building’s structure, common areas, and exterior, requiring the HO6 policy to cover everything from the bare walls inward, including interior walls, floors, fixtures, and finishes. A “single entity” master policy is more comprehensive, covering the building, common areas, and the original fixtures and finishes within each unit, meaning the HO6 policy would primarily cover personal property and any upgrades made by the owner. The “all-in” or “all-inclusive” master policy is the most extensive, covering the building, common areas, and all permanent fixtures and improvements within the unit, even upgrades, leaving the HO6 policy to mainly cover personal property, liability, and loss assessments.