HO-6 Condo/Apartment Home Insurance

What is condo insurance?

Condo insurance, sometimes called "HO6 insurance," can cover liability claims, damage to the condo unit and personal property, and additional living expenses incurred when the unit is uninhabitable due to a covered event. Condo insurance typically does not cover common areas in the apartment building, such as hallways, sidewalks, and parking lots, which are the responsibility of the condo owners association. For example, townhomes, rowhomes, and subdivisions, while not defined as condos, are also covered by condo insurance or HO6 insurance.

Do I have to buy condo insurance/HO6 insurance?

If you have a condo mortgage, your lender will usually require you to purchase HO-6 insurance. In addition, your owner or condo association may also require specific coverage and limits. Even if your condo is paid off, condo insurance is still highly recommended—after all, your condo may be one of your most important and valuable assets, and it is still necessary to provide the greatest protection for it.

What does condo insurance cover?

Similar to homeowners insurance, HO-6 insurance protects against property damage and liability claims, unless the condo association's master insurance policy already provides relevant coverage. The following are the standard condo insurance coverages:

Dwelling Coverage: Pays for the repair or replacement of property damage starting from the interior walls if caused by a covered event.
Personal Property: Pays for the repair or replacement of your belongings, up to the specified limit, and not included in the condo association's master insurance policy. Any items not permanently affixed to the unit are considered personal property, including clothing, furniture, and electronics.
Liability Coverage: Personal liability coverage provides compensation if you are legally responsible for damage or injury to others, up to your HO6 policy limit. Liability coverage can also pay for medical expenses arising from accidents within your condo.
Loss of Use: If a covered event makes your condo uninhabitable, loss of use coverage will pay for additional living expenses, including meals and hotel stays, up to the policy limit.
Loss Assessment: Loss assessment coverage can help if an accident occurs in a common area of the condo (such as a pool, stairwell, or clubhouse). Usually, the condo association's master insurance policy covers these accidents, but if the damage amount exceeds the master policy limit, you may need to share the difference with other residents. Condo insurance typically provides $1,000 in loss assessment coverage, but you can choose to increase the limit.

Common Covered Perils

Perils are events that can cause damage to the condo unit or personal property. Here are some perils that condo insurance policies usually cover:

Fire and lightning
Windstorm and hail
Theft and vandalism
Weight of ice, snow, or sleet

What does condo insurance not include?

Your HO6 insurance policy will list some items that are not covered. Common examples include:

Earthquakes
Flooding
Damage caused by termites
Natural wear and tear

Condo insurance also does not cover the common areas of the apartment building and property owned by the condo association, such as stairwells and clubhouses. This is covered by the condo association's master policy.

What is HOA insurance?

Your Homeowners Association (HOA) is responsible for purchasing a master policy for the common areas of the condo development. Part of the master policy premium is usually included in your monthly or annual fee. The master policy covers damage or injury in the shared spaces of the condo (such as meeting rooms, pools, and tennis courts). The specific coverage and exclusions will vary by condo association, which will help you determine your own condo insurance needs.

Types of HOA Insurance

Here are three types of condo master insurance policies:

All-in Coverage: Also known as "all-inclusive insurance," this is the most comprehensive type of coverage, covering all property in the condo development and the fixtures within the unit. You are only responsible for insuring your personal property.
Bare Walls Coverage: Only covers shared areas and property owned by the owners association, excluding the internal walls and fixtures within your unit.
Single Entity Coverage: Protects shared areas and association-owned property. Unlike bare walls coverage, it also covers the original built-in fixtures and structural parts within your unit.

HOA Insurance vs. HO6 Insurance

Although "all-in" master insurance policies usually cover the basic structure of the condo, there are still some fundamental differences between the association master policy and HO6 insurance:

What is the difference between HO3 insurance and HO6 insurance?

An HO3 policy homeowner owns and is responsible for everything on their property (house, garage, fence, etc.), while an HO6 policy homeowner is only responsible for the parts within the outermost walls of their unit.

The Homeowners Association (HOA) typically purchases a master insurance policy for the entire building, covering all areas outside the walls, including common areas and surrounding property.

For example, if a guest is injured in your backyard, you would not be held liable if you live in a condo; the owners association's insurance would be responsible. However, if you live in a detached house, your homeowners insurance would bear the primary responsibility.

How much condo insurance do you need?

Your insurance choices and limits depend on the scope of the condo association's master insurance policy and the amount you need to protect your assets and personal property.

Dwelling Coverage: If your association policy is "All-in Coverage," you may not need much dwelling coverage; but if it is "Bare Walls Coverage," you will need coverage for appliances, carpets, and other fixtures.
Personal Property: Determine the personal property coverage limit by creating a home inventory. For example, if the total value of your belongings is $75,000, you need at least the equivalent amount of coverage.
Liability Coverage: Choose a limit that best protects your assets. Most condo insurance companies offer a minimum limit of $100,000 and a maximum of $500,000. If you need more than $500,000 in liability coverage, consider purchasing an umbrella policy.
Loss of Use: The loss of use insurance limit is usually 20% of the total insurance amount for the dwelling structure and personal property. For example, if the dwelling structure insurance limit is $70,000 and personal property is $30,000, you can receive up to $20,000 in loss of use compensation.

How much does condo insurance cost?

The cost of condo insurance varies slightly among different companies. However, factors that affect the cost of condo insurance include location, claims history, fire protection measures, credit score, coverage choices, deductibles, and the condition of the condo.

Need more details about condo insurance or want to get a personalized home insurance quote? Please contact us immediately!

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How much does condo insurance cost?