What Is a Condo Rider for Insurance?

A condo rider, formally known as an HO-6 insurance policy, provides financial protection for condominium owners. It is an endorsement or add-on to a standard homeowner’s insurance policy. This specialized coverage extends beyond what a condominium association’s master insurance policy provides, addressing risks and coverage gaps unique to individual unit ownership.

What is a Condo Rider

A condo rider, or HO-6 policy, is a type of homeowners coverage designed for condominium and co-op owners. It modifies or extends an existing personal insurance policy to suit the unique aspects of condo ownership. The HO-6 policy protects the interior of an individual unit and personal belongings within it, along with offering personal liability coverage.

This policy fills coverage gaps not addressed by the condominium association’s master insurance policy. While the master policy covers the building’s exterior and common areas, the HO-6 policy focuses on the individual unit owner’s interests inside their unit. It protects the unit owner from perils and losses affecting their personal space and possessions. This coverage is often required by mortgage lenders and condominium associations.

Coverage Provided by a Condo Rider

A condo rider, or HO-6 policy, offers several types of coverage tailored to the individual unit owner’s needs. Personal Property Coverage protects the owner’s belongings inside their unit, including furniture, electronics, and clothing, from perils like fire, theft, and vandalism. This coverage can also extend to items stolen outside the home.

Personal Liability Coverage provides financial protection if someone is injured within the unit or if the owner accidentally damages another unit or property. This coverage helps pay for legal costs, medical expenses for injured guests, and damages. Most policies provide a minimum of $100,000 in personal liability coverage, with options to increase this amount. This protection is separate from the condo association’s liability coverage for common areas.

Loss Assessment Coverage protects unit owners when the homeowners association (HOA) levies a special assessment. This occurs if damages to common areas exceed the master policy’s limits or are not covered, requiring unit owners to contribute. This coverage helps pay for the individual unit owner’s share of such costs. Policies typically provide around $1,000 for loss assessment coverage, which can often be increased through an endorsement.

Improvements and Betterments Coverage covers renovations and upgrades made by the unit owner within their unit, such as new flooring or custom cabinets. The condo rider helps cover the cost of repairing or replacing these upgrades if damaged by a covered peril, especially if the master policy only covers original materials.

Loss of Use Coverage, also known as Additional Living Expenses (ALE), helps with temporary living expenses if the unit becomes uninhabitable due to a covered peril. This includes costs like hotel stays and meals while the unit is being repaired. This ensures the unit owner can maintain their standard of living during displacement. The HOA master policy typically does not cover these individual relocation costs.

Distinguishing Personal Coverage from Master Policy

The division of insurance responsibilities between a condo unit owner and the condominium association’s master policy is important for comprehensive coverage. The master policy, paid for through HOA fees, covers the building’s exterior, common areas, and shared utilities like the roof, hallways, and amenities. This policy also includes liability coverage for incidents in these shared spaces.

A condo rider (HO-6 policy) covers the individual unit’s interior, personal belongings, and the owner’s personal liability. It provides “walls-in” coverage, protecting everything from the interior surfaces of the walls inward, including fixtures, appliances, and personal property. The scope of coverage for the unit’s interior varies depending on the type of master policy the association carries.

Three types of master policies dictate the unit owner’s responsibilities: “bare walls-in,” “single entity,” and “all-in” coverage. A “bare walls-in” policy offers the least coverage, insuring only the building’s structure up to the drywall, leaving the unit owner responsible for most interior elements. A “single entity” policy covers original fixtures within the unit but not owner improvements. The “all-in” policy provides the most comprehensive coverage, often including fixtures and some structural improvements within the units. Regardless of the master policy type, a condo rider is necessary to cover personal property, personal liability, and loss assessments levied by the HOA.

Getting a Condo Rider

Obtaining a condo rider, or HO-6 policy, requires gathering specific information for adequate coverage. A unit owner needs to provide details about the condominium’s address and unit characteristics, such as square footage and number of rooms. Information about the homeowners association’s (HOA) master policy is also important, including its coverage type, deductible, and insurer. This helps determine what gaps your personal policy needs to fill.

The process begins by contacting an insurance agent or company offering homeowner’s insurance. Providing this information allows the insurer to offer quotes based on necessary coverage limits for personal property, liability, and other endorsements like loss assessment. Compare quotes from multiple companies to find a policy that best fits individual needs and budget. Many financial institutions or lenders require an HO-6 policy as a condition of a mortgage.