What Does an HO6 Insurance Policy Cover?

An HO6 insurance policy, often referred to as condo insurance, is designed for individuals who own a condominium or cooperative unit. This policy covers risks and responsibilities not addressed by the master insurance policy held by the association. Its primary purpose is to bridge coverage gaps between the association’s policy, which protects the building’s exterior and common areas, and the unit owner’s personal needs. An HO6 policy helps safeguard the owner’s financial investment in their unit and personal belongings.

Coverage for Your Unit’s Interior

An HO6 policy provides “walls-in” coverage, meaning it protects the interior structure of your unit. This coverage extends to elements from the unfinished walls inward, encompassing fixtures, built-in appliances, and any improvements or alterations you have made. Examples of covered items include cabinetry, flooring, countertops, and wall coverings.

The master policy maintained by the condominium or cooperative association generally covers the building’s exterior, shared infrastructure, and common areas like lobbies and hallways. Your HO6 policy ensures that if a covered peril, such as fire or a burst pipe, damages the interior components you are responsible for, those repairs or replacements are financially supported. The extent of this coverage often depends on the specific terms of your association’s master policy, as some may offer more comprehensive interior coverage.

Protection for Your Personal Belongings

Beyond the unit’s interior structure, an HO6 policy also provides protection for your personal belongings. This includes movable possessions such as furniture, clothing, and electronics. This coverage typically applies whether your belongings are inside your unit or, in some cases, temporarily away from the premises, such as items stolen from your car.

Standard policies generally protect against common perils like fire, theft, windstorm, hail, and vandalism. While a broad range of items are covered, specific limits often apply to high-value items like jewelry, furs, art, or collectibles. If you possess such items that exceed these standard limits, you may need to purchase additional coverage, often referred to as a “rider” or “scheduled personal property” endorsement, to ensure their full protection.

Liability and Additional Living Expenses

An HO6 policy includes personal liability coverage, which protects you if you are found legally responsible for bodily injury or property damage to others. For instance, if a guest slips and falls inside your unit and sustains an injury, or if a pipe bursts in your unit and causes water damage to a neighbor’s property, this coverage can help with legal expenses, medical bills, and repair costs. Most policies offer a minimum of $100,000 in liability coverage, with options to increase these limits.

The policy also incorporates Additional Living Expenses (ALE) coverage, often called Loss of Use. If your condominium becomes uninhabitable due to a covered event, such as a fire or significant water damage, ALE coverage helps pay for increased living costs. These expenses can include temporary housing, restaurant meals, and other necessary expenditures incurred while your unit is being repaired or rebuilt. This coverage provides financial support to maintain your normal standard of living during a displacement.

Understanding Common Exclusions

While an HO6 policy offers substantial protection, it has common exclusions. These include damage caused by floods and earthquakes, which usually require separate, specialized policies. Damage resulting from mold, unless directly caused by a covered peril like a burst pipe, is often excluded, particularly if it stems from a lack of proper maintenance.

Additionally, normal wear and tear on your unit’s components or personal belongings is not covered, as this is considered a cost of ownership and routine maintenance. Damage resulting from neglect or intentional acts is also typically excluded from coverage. Understanding these exclusions helps unit owners identify potential gaps and consider whether additional policies or endorsements are necessary.