What Does HO6 Insurance Cover for a Condo?

An HO6 insurance policy is a specialized form of homeowners insurance tailored for individuals who own a condominium or cooperative unit. This coverage addresses specific risks and responsibilities that fall to the unit owner, distinct from what is covered by the building’s master insurance policy. An HO6 policy fills coverage gaps, protecting the interior of the unit, personal belongings, and personal liability. It complements the condominium association’s insurance, which covers the building’s exterior and common areas.

Standard HO6 Coverage

A standard HO6 policy provides several layers of protection for condominium unit owners. Dwelling coverage, often called “walls-in” coverage, protects the interior structure of the individual unit. This includes interior walls, flooring, cabinetry, permanent fixtures, and any improvements or alterations made to the unit. This coverage is distinct from the building’s exterior, which falls under the master policy.

Personal property coverage protects the policyholder’s belongings such as furniture, electronics, clothing, and appliances. This coverage extends to items both inside the unit and off-premises, safeguarding against perils like fire, theft, and vandalism.

Loss of use, also known as additional living expenses (ALE) coverage, provides financial assistance if the unit becomes uninhabitable due to a covered loss. This helps cover temporary housing, meals, and other increased living costs while the unit is being repaired or rebuilt.

Personal liability coverage protects the unit owner against claims for bodily injury or property damage to others for which they are legally responsible. This applies to incidents within the unit or away from the premises. It covers legal defense costs and damages, up to the policy’s limits.

Medical payments to others coverage provides for minor medical expenses for guests injured on the policyholder’s property, regardless of who was at fault. This helps cover immediate medical costs without requiring a liability claim or lawsuit.

Common HO6 Exclusions

An HO6 policy does not cover every potential risk. Damage to the external structure of the building and common areas, such as lobbies, hallways, and the roof, are excluded from an individual HO6 policy. These elements are the responsibility of the condominium association’s master policy.

Damage from natural disasters like flooding or earthquakes is excluded from standard HO6 coverage. Unit owners seeking protection against these perils require separate, specialized policies or endorsements.

Losses caused by neglect or lack of proper maintenance are not covered by an HO6 policy. Damage from deferred maintenance, such as persistent leaks or pest infestations, will be denied. Damage due to routine wear and tear is also excluded.

Intentional damage caused by the policyholder or those residing in the unit is excluded from coverage. Mold damage often has limitations; while mold from a covered peril (like a burst pipe) might be covered, mold due to poor maintenance or pre-existing conditions is not.

Relationship with the Master Policy

An HO6 policy operates with the condominium association’s master insurance policy. The scope of the master policy directly influences the necessary dwelling coverage for an individual unit owner’s HO6 policy.

A “bare walls-in” or “walls-out” master policy covers only the building’s main structure, exterior, and common areas. Under this arrangement, the unit owner is responsible for everything from the drywall inward, including fixtures, appliances, and improvements. A robust HO6 policy with substantial dwelling coverage is important to cover the interior of the unit.

A “single entity” or “original specifications” master policy offers broader coverage, including the building’s exterior, common areas, and the original fixtures and finishes within each unit. This policy does not cover improvements or upgrades made by the unit owner. The HO6 policy covers personal property, liability, and the value of any unit enhancements.

The most comprehensive master policy is called “all-in” or “all-inclusive,” covering the entire building, common areas, and the unit’s interior, including improvements. Even with an “all-in” policy, an HO6 policy is necessary for the unit owner’s personal property, personal liability, and additional living expenses. An HO6 policy can also provide coverage for loss assessments, which are charges levied by the HOA to unit owners for damages that exceed the master policy’s limits or deductibles.

Optional HO6 Endorsements

Unit owners can enhance their HO6 protection by adding optional endorsements:

Scheduled personal property coverage for high-value items like jewelry, fine art, or collectibles, which may have limited coverage under a standard personal property policy.
Water backup and sump pump overflow coverage for damage caused by sewer or drain backups into the unit, often excluded from standard policies.
Identity theft protection covering expenses to restore one’s identity following a theft, including legal assistance, credit monitoring, and administrative fees.
Increased limits endorsements for items exceeding standard personal property sub-limits, such as electronics or furs, providing higher coverage amounts.
A home business coverage endorsement if a unit is used for a home-based business, protecting equipment, inventory, and liability risks not covered by a personal HO6 policy.
Unit Owners Special Coverage A broadens the HO6 policy from “named perils” to “open perils,” protecting against any risk not specifically excluded.
A personal umbrella policy provides an extra layer of liability protection beyond standard HO6 limits, covering catastrophic claims.