What Is the Difference Between an HO3 and HO6 Policy?

Homeowners insurance provides financial protection against damages to a residence, its contents, and liability for accidents on the property. Understanding policy types is important for securing suitable coverage.

HO3 Homeowners Insurance: Coverage for Houses

An HO3 policy is the most common form of homeowners insurance, designed for single-family homes, multi-family homes, and townhouses where the owner resides. This policy offers comprehensive protection for the dwelling’s physical structure and other property structures. The dwelling and attached structures, like a porch or garage, are covered on an “open perils” or “all-risk” basis, meaning they are insured against all causes of loss unless specifically excluded. Common exclusions include floods, earthquakes, sinkholes, and wear and tear.

Coverage extends to detached structures like fences, sheds, and garages. These are also covered on an open perils basis. For personal belongings, HO3 policies provide “named perils” coverage, meaning protection is limited to specific events listed in the policy, such as fire, theft, vandalism, or windstorm.

Beyond property damage, an HO3 policy includes personal liability coverage, protecting the homeowner if responsible for bodily injury or property damage to others. It also covers additional living expenses (loss of use coverage), helping with costs like hotel stays and meals if the home becomes uninhabitable due to a covered loss. Medical payments to others coverage is standard, assisting with medical bills for guests injured on the property, regardless of fault.

HO6 Homeowners Insurance: Coverage for Condos and Co-ops

An HO6 policy, often called condo insurance, is a specialized homeowners coverage for condominium or co-operative unit owners. Unlike single-family homes, condo and co-op units are part of a larger building where common areas and the exterior structure are insured under a master policy held by the homeowners association (HOA) or co-op association. This master policy covers shared elements like lobbies, elevators, roofs, and exterior walls.

The HO6 policy covers the individual unit’s interior, often called “walls-in” coverage. This includes fixtures, improvements, and built-in appliances like flooring, cabinets, and interior walls. The extent of this “walls-in” coverage depends on the condo association’s master policy.

Similar to HO3 policies, an HO6 policy provides personal property coverage, protecting belongings like furniture, clothing, and electronics against specified perils. It also includes personal liability coverage, protecting the unit owner if responsible for injury to others or damage to their property. Additional living expenses are covered if the unit becomes uninhabitable due to a covered event, helping with temporary housing and increased living costs. HO6 policies also offer loss assessment coverage, which helps pay for a unit owner’s share of costs if damages to common areas exceed the master policy’s limits.

Core Distinctions Between HO3 and HO6

The differences between HO3 and HO6 policies stem from the distinct ownership structures of single-family homes versus condominium or co-operative units. An HO3 policy covers the entire physical structure of a single-family home, including the exterior, interior, and attached structures. It also extends to detached structures like sheds and fences. This broad structural coverage reflects the homeowner’s full responsibility for the entire dwelling and surrounding property.

In contrast, an HO6 policy primarily covers the interior of a condo or co-op unit, from the “walls-in.” The building’s exterior, common areas, and shared structures are covered by the condo or co-op association’s master policy. An HO6 policy does not include coverage for exterior elements like roofs or shared walls, as these fall under the association’s purview. This distinction means an HO3 covers the entire building, while an HO6 focuses on the unit owner’s interests within the larger structure.

Both policy types include personal property coverage, protecting belongings inside the home or unit. However, an HO6 policy owner might need to consider personal property limits carefully due to the smaller insured space compared to a house. Both also offer personal liability coverage, but the scope of property liability differs given the ownership structure; an HO3 covers liability for the entire property, while an HO6 covers liability primarily within the individual unit and potentially for accidental damage to common areas.

Other structures coverage is a standard component of an HO3 policy, addressing detached buildings on a single-family property. An HO6 policy does not include this coverage, as equivalent structures in a condominium or co-operative complex are part of the common elements insured by the master policy. The association’s master policy terms are important for determining HO6 coverage, distinguishing it from the self-contained coverage of an HO3.