What Is an HO6 Homeowners Insurance Policy?

Homeowners insurance policies provide financial protection for property owners against various perils. An HO6 insurance policy is a specialized type of homeowners coverage for condominium or cooperative unit owners. It serves as a safeguard for unit owners, complementing the master insurance policy held by a Homeowners Association (HOA) or condominium association. This policy is often required by mortgage lenders and building associations.

HO6 Policy Basics

An HO6 policy, often called condo insurance, focuses on the interior of an individual unit, unlike standard homeowners insurance (HO3 policies) for single-family homes. It addresses insurance gaps left by an HOA’s master policy. The HOA master policy covers the building’s exterior, common areas, and the original structure of the units, but not the individual unit owner’s personal property or interior alterations. An HO6 policy insures aspects not covered by the association’s plan.

Dwelling Coverage for Unit Owners

Dwelling coverage within an HO6 policy protects the interior structure of the individual unit, often called “walls-in” or “studs-in” coverage. This covers everything from the unfinished walls inward. It protects elements like the unit’s interior walls, ceilings, and floors. Covered items also include fixtures, improvements, built-in appliances, cabinetry, and other permanent fixtures the owner is responsible for.

This coverage is important because the HOA master policy usually covers the building’s exterior, common elements, and the original construction of the unit. For instance, if a fire originates outside your unit and damages the building’s structure, the HOA master policy covers exterior repairs. However, if that fire then damages your interior walls, flooring, or built-in cabinets, your HO6 dwelling coverage applies.

The scope of dwelling coverage can depend on the HOA’s master policy type, which can range from “bare walls” (requiring the unit owner to cover almost everything inside) to “all-in” or “single entity” (where the master policy covers more of the interior, including some fixtures). Unit owners should understand their association’s master policy to ensure their HO6 dwelling coverage fills any remaining gaps.

Protecting Personal Property and Liability

Beyond structural coverage, an HO6 policy includes standard components similar to traditional homeowners insurance. Personal Property coverage protects the unit owner’s belongings from covered perils such as fire, theft, or vandalism. This includes furniture, electronics, clothing, and other movable items. Personal property coverage can also extend to items stolen or damaged outside the unit, such as belongings taken from a vehicle.

Loss of Use coverage, also known as Additional Living Expenses, assists if the unit becomes uninhabitable due to a covered loss. This coverage helps pay for reasonable expenses like hotel stays, temporary housing, and meals while the unit is being repaired. Personal Liability coverage protects the unit owner from financial responsibility if they are legally liable for bodily injury or property damage to others. This can include legal expenses and medical bills if someone is injured in the unit or if the owner accidentally causes damage to another person’s property. Medical Payments to Others covers minor medical expenses for guests injured on the property, regardless of who is at fault.

Standard Exclusions and Additional Coverage Options

While an HO6 policy provides comprehensive coverage, certain perils and situations are excluded. Common exclusions include damage from floods, earthquakes, and earth movement like landslides or sinkholes. Other standard exclusions encompass wear and tear, neglect, pest infestations, and intentional damage caused by the policyholder. Damage from sewer backups or water that rises from the ground is also frequently excluded.

Unit owners can extend their coverage by adding endorsements or riders to their HO6 policy. For risks like water backup, specific endorsements are often available to cover damage from sewer or drain overflows. For high-value items such as jewelry, art, or collectibles, scheduling personal property can provide increased coverage beyond standard limits, often requiring an appraisal. Loss assessment coverage is another valuable endorsement, helping to cover a unit owner’s share of costs if the HOA levies a special assessment for a covered loss that exceeds the master policy’s limits or deductible.