What Is an HO6 Homeowners Policy for Condos?

An HO6 homeowners policy provides specialized insurance coverage for condominium or cooperative unit owners. This policy covers the interior of the unit and personal belongings. It works with the master insurance policy held by the homeowners association (HOA), which typically covers the building’s exterior and common areas. An HO6 policy fills coverage gaps left by the master policy.

Key Coverages of an HO6 Policy

An HO6 policy includes several standard components. Dwelling coverage, often called “walls-in” coverage, safeguards the interior structure of the unit. It covers owner-made fixtures, improvements, and alterations like drywall, flooring, and built-in appliances, distinguishing them from the building structure covered by the master policy.

Personal property coverage protects belongings against perils like fire, theft, or vandalism. This includes furniture, clothing, and electronics. The policy also includes personal liability coverage, which protects if the policyholder is legally responsible for bodily injury or property damage to others.

Loss of use coverage, also known as additional living expenses, covers extra costs for temporary housing, food, and other necessary living expenses if the unit becomes uninhabitable due to a covered loss. For instance, if a burst pipe forces a temporary relocation, this coverage helps with hotel bills and meals. Loss assessment coverage helps cover the policyholder’s share of assessments levied by the HOA. These assessments can arise when damage to common areas exceeds the master policy’s limits or when specific master policy deductibles apply to unit owners.

Tailoring Your HO6 Policy

Determining appropriate HO6 coverage involves assessing individual needs and unit characteristics. For interior dwelling, estimate the value of improvements and fixtures not covered by the master policy, including renovations, built-ins, and other enhancements made since the unit’s original construction or purchase.

Evaluating personal property value requires an inventory of belongings to ensure adequate coverage. Policyholders should choose between actual cash value (ACV), which pays the depreciated value of items, or replacement cost coverage, which funds new item replacement.

Personal liability limits depend on personal assets and potential risks. Most HO6 policies offer a minimum of $100,000 in liability coverage, with options to increase up to $500,000 or more. Umbrella insurance policies can provide even higher limits. Optional coverages, known as endorsements, can be added. These include water backup coverage for drain damage, scheduled personal property coverage for high-value items like jewelry, or identity theft protection.

HO6 Policies and Master Condo Insurance

Understanding the interplay between an individual HO6 policy and the master insurance policy held by the condominium association is important for condo owners. Master policies vary and generally fall into three types: “bare walls-in,” “single entity,” and “all-in” coverage.

A “bare walls-in” policy covers only the building’s exterior, framing, and common elements, leaving the unit owner responsible for everything inside their unit, including walls, fixtures, and appliances. “Single entity” policies expand on bare walls coverage by including original fixtures and built-in property, such as standard finishes and light fixtures, but typically exclude owner-made improvements or upgrades. The most comprehensive, “all-in” coverage, insures the entire structure, including original fixtures and any upgrades or improvements made by unit owners, meaning the individual HO6 policy primarily covers personal belongings.

The HO6 policy fills gaps left by the master policy, particularly regarding the interior of the unit, personal property, and specific assessments. Review the condominium association’s bylaws and the master policy’s declaration page to understand what is covered by the association and what remains the unit owner’s responsibility. Master policy deductibles can impact unit owners, especially if damage to common areas or an individual unit’s interior structure falls below the master policy’s deductible. In such cases, unit owners may be assessed a portion of the deductible, making adequate loss assessment coverage important within their HO6 policy.