What Is HO6 Condo Insurance in Florida?

HO6 insurance is a specialized policy for individuals who own condominium units. This coverage protects the financial interests of condo owners. Understanding HO6 insurance is fundamental for safeguarding their investment and personal belongings within a condominium.

Understanding HO6 Insurance in Florida

HO6 insurance is often called a “walls-in” policy, covering the interior of a unit from the drywall inward. This policy protects the owner’s personal property, the unit’s interior structure, and personal liability. It complements the condominium association’s master insurance policy.

This coverage is important due to the unique ownership structure of condominiums. Unlike a standard homeowner’s (HO3) policy, which covers the entire dwelling, an HO6 policy focuses on what the individual unit owner is responsible for. This defines the division of insurance responsibility between the unit owner and the association.

Key Coverages of an HO6 Policy

Dwelling coverage addresses the interior of the condominium unit. This includes damage to permanent fixtures, built-in cabinets, flooring, paint, and any alterations or improvements made by the unit owner. It covers structural elements inside the unit not typically covered by the condo association’s master policy.

Personal property coverage protects the owner’s movable belongings, such as furniture, electronics, clothing, and non-built-in appliances. Owners choose between actual cash value (ACV), which accounts for depreciation, or replacement cost value (RCV), which pays for new items. RCV provides more comprehensive protection.

Personal liability coverage addresses legal costs and damages if the unit owner is responsible for bodily injury or property damage to others. For instance, if a visitor is injured inside the unit or a water leak from the unit damages a neighboring property, this coverage can help mitigate the financial impact. This protection extends beyond the unit, covering incidents elsewhere if the owner is liable.

Loss of use coverage, also known as additional living expenses, provides financial assistance if the condo unit becomes uninhabitable due to a covered loss. This coverage can pay for temporary housing, such as a hotel, and increased living expenses like meals or laundry services while the unit is being repaired or rebuilt.

Common Exclusions in HO6 Policies

A standard HO6 policy excludes flood damage, which requires a separate flood insurance policy. This exclusion is important for condo owners, especially in coastal regions. Earthquake damage is another common exclusion, requiring a specific endorsement or standalone policy.

Damage from maintenance issues, gradual deterioration, or wear and tear is not covered. Insurance is designed for sudden and accidental losses, not routine upkeep or neglect. For example, a slow leak leading to rot would not be covered, but a sudden burst pipe might be.

Mold damage is excluded if it arises from long-term moisture problems or insufficient maintenance. However, if mold growth is a direct consequence of a sudden and accidental covered peril, such as a burst pipe, the related damage might be covered. Unit owners should review their policy language regarding mold.

Damage to common areas, such as lobbies, exterior walls, and roofs, is the responsibility of the condo association’s master policy. An individual HO6 policy does not cover these shared elements.

Interaction with Condo Association Master Policies

HO6 insurance works with, yet distinctly from, the condominium association’s master insurance policy. The scope of an HO6 policy is influenced by the type of master policy held by the condo association. Several common types of master policies define different responsibilities for the unit owner.

Under a “bare walls-in” or “studs-in” master policy, the association’s coverage extends only to the basic building structure. The HO6 policy must then provide extensive coverage for all interior finishes, fixtures, built-in appliances, and any owner-made improvements or alterations, requiring higher dwelling coverage.

A “single entity” master policy covers the building, including fixtures and standard finishes within units as originally installed. However, this policy does not cover personal property or any upgrades made by the unit owner. The HO6 policy therefore covers the owner’s personal property and any enhancements or alterations beyond original finishes.

An “all-in” or “all-inclusive” master policy provides the broadest association coverage, encompassing the building, fixtures, and improvements within units, including some upgrades. With this master policy, the individual HO6 policy primarily focuses on personal property and personal liability protection, with less need for extensive dwelling coverage. Unit owners should review the condo association’s Covenants, Conditions, and Restrictions (CC&Rs) and master policy documents. These outline the division of insurance responsibilities, which is essential for determining the appropriate scope and limits of individual HO6 coverage.

Factors Influencing HO6 Premiums in Florida

Several factors influence the cost of an HO6 policy. The geographical location of the unit plays a role, especially in hazard-prone areas. Proximity to the coast or designation within a high-wind area can affect premium calculations due as it increases risk.

The choice of deductible also impacts premiums; selecting a higher deductible results in lower payments. Specific coverage limits chosen for personal property, dwelling coverage, and liability directly contribute to the overall cost. Higher coverage amounts lead to higher premiums.

Building characteristics, such as age, construction type, and adherence to current building codes, are considered. Older buildings or those with certain construction materials might face different premium structures. The presence of wind mitigation features, such as hurricane shutters, reinforced roofs, or impact-resistant windows, can qualify for premium discounts. An individual’s past claims history can also influence their insurance rates.