An HO-6 policy, also known as condo insurance, is a type of homeowners insurance specifically designed for condominium and co-op unit owners. It provides coverage for your personal belongings, liability, and damage to your unit not covered by your condo association’s master policy.
If you’re living in a condo, HO-6 insurance can provide financial help if you experience a fire, burglary, or other covered peril. Keep reading to learn whether an HO-6 homeowners insurance policy is right for you.
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How HO-6 Homeowners Insurance Works
HO-6 homeowners insurance operates similarly to other types of homeowners insurance. First, you select the level of coverage you’d like on the structure and personal property. Then, if covered perils damage your property or possessions, you submit your claim to the insurance company for a payout.
HO-6 insurance offers a variety of coverages, including:
- Personal property coverage: This covers your personal belongings, such as furniture, clothing, electronics, and jewelry.
- Dwelling coverage: This covers damage to your unit’s interior, including walls, floors, fixtures, and appliances.
- Loss of use coverage: This helps pay for temporary housing, meals, and additional living expenses if you have to leave your unit due to a covered loss.
- Personal liability coverage: This covers your legal expenses if you’re sued for accidentally harming others or damaging their property. It can also help pay for medical expenses.
- Loss assessment coverage: This is an optional coverage that helps you pay for any damage to condo common areas that’s not covered by your condo association’s master policy.
Coverages
HO-6 insurance provides coverage for a variety of perils, including:
- Accidental water leaks or burst pipes
- Aircraft or vehicle crashes
- Damage from civil disturbances
- Explosions
- Falling objects, such as tree branches
- Freezing of plumbing or HVAC units
- Lighting strikes
- Fire
- Smoke
- Storm damage
- Theft
- Vandalism
- Volcanic eruptions
- Weight of ice, snow, or sleet
While many natural disasters are covered, you usually have to add this coverage separately to get coverage for events like earthquakes and floods. Read your policy carefully to understand what is and is not covered, as every policy is slightly different.
Exclusions
HO-6 insurance policies have limitations. These exclusions vary by policy, but perils often excluded from HO-6 coverage include:
- Earthquakes
- Floods
- Government actions
- Intentional acts of damage
- Issues resulting from lack of maintenance
- Mold
- Pet damage
- Routine wear and tear
- War and nuclear hazards
Every policy is different. Always review your specific policy terms and consult with the insurance provider to understand the full extent of coverage and exclusions.
Keep in mind that HO-6 insurance also does not cover any damages done to common areas, even if it is caused by a covered peril. For that, you need to submit a claim to your condo association’s master policy.
Types of Home Insurance Policies
HO-6 insurance is just one of eight different kinds of homeowners insurance. Each type of insurance offers slightly different coverage. For example, there are unique policies for single-family homes, rental properties, and mobile homes. Consult this table to see the differences between them.
Home Insurance Form Categories | Dwelling Type | Named or Open Peril | Dwelling Coverage | Other Structures Coverage | Personal Property Coverage | Liability Coverage | Medical Payments Coverage | |
|---|---|---|---|---|---|---|---|---|
HO-1, or 10 Named Perils Insurance | Single-family home | Named | Yes | Varies | No | Varies | Varies | Varies |
HO-2, or 16 Named Perils Insurance | Single-family home | Named | Yes | Varies | Yes | Varies | Varies | Varies |
HO-3, or Standard Home Insurance | Single-family home | Dwelling limit is open, personal property is named | Yes | Yes | Yes | Yes | Yes | Yes |
HO-4, or Renter’s Insurance | Rental property | Named | No | No | Yes | Yes | Yes | Yes |
HO-5, or Open Perils Insurance | Single-family home | Open | Yes | Yes | Yes | Yes | Yes | Yes |
HO-6, or Condo Insurance | Condo, co-op, or townhome* | Named | Some | No | Yes | Yes | Yes | Yes |
HO-7, or Mobile Home Insurance | Mobile home | Open | Yes | Varies | Yes | Yes | Varies | Yes |
HO-8, or Modified Coverage Home Insurance | Varies** | Named | Yes | Yes | Yes | Yes | Varies | Varies |
** Homes that are not eligible for standard home insurance policies; criteria may differ based on state and insurer
How Much Does HO-6 Insurance Cost?
On average, H0-6 coverage costs about about $50 a month. However, this cost is separate from condo fees for the master policy and is highly variable.
One of the more influential components is the level of coverage you choose. Higher coverage limits lead to increased costs. So can choosing a policy with a low deductible. Generally, the lower the deductible, the higher your premiums.
The location of the condominium, including the local crime rate and proximity to emergency services, also affects rates. For example, if you buy a unit in an area that sees a lot of robberies, your insurance company may charge more to compensate for the higher risk of theft.
Buying a unit in an older building can also increase your costs. To the insurance company, this means there’s a higher chance you’ll need repairs. Your personal history can also affect what your insurance company charges. You might pay more if you have a low credit score or a high historical rate of claims.
Should You Consider an HO-6 Policy?
- It covers a wide array of perils
- It covers more than just the condo
- It’s usually required
- There’s a large exclusion list
- You might not need it if your condo association has a strong policy
- It might be unaffordable
For many people, an HO-6 policy can offer assistance in unexpected situations. But for others, it might not make financial sense. Here are the pros and cons of an HO-6 policy to help you decide.
Pros
- It covers a wide array of perils: HO-6 insurance covers more perils than master condo insurance. With HO-6 insurance for your individual condo, you can enjoy protection against unexpected events like fire, theft, and vandalism.
- It covers more than just the condo: One of the selling points of HO-6 insurance is that it includespersonal property coverage, meaning your possessions are replaced if they’re lost or damaged. However, an HO-6 policy also offers liability coverage and loss of use coverage. Without these coverages, you might be responsible for paying someone’s expensive medical bills or paying to live out of a hotel while your condo is repaired out of pocket.
- It’s usually required: In many cases, condo associations require unit owners to have HO-6 insurance. This is because of the integrated nature of condos. If one unit suffers damages that are not repaired, it could affect another condo.
Cons
- There’s a large exclusion list: While HO-6 policies cover a lot of perils, there’s also a lot they exclude. For example, typical policies do not earthquakes or flooding, necessitating additional coverage for these specific risks. These costs could add up, especially if you live in a high-risk flood zone.
- You might not need it if your condo association has a strong policy: If your condo association has opted for all-in coverage for your building, you’d receive a large payout after a covered disaster. The structural, high-value parts of your condo would be covered, meaning you’d only lose out on your personal property. In these cases, you might not want to pay for additional insurance. That said, it’s rare to have a condo association with this type of robust coverage.
- It might be unaffordable. After buying a new condo, your budget may be stretched to the max. Adding on an insurance payment each month might put you in a position of financial stress.
What This Means for You
While your condo’s master policy does offer some coverage for the shared parts of your building, it’s usually up to you to insure the inside of your condo. By choosing HO-6 insurance, you’re protecting yourself financially in case there’s a covered accident. HO-6 insurance does not cover every possible peril, such as floods or earthquakes, but it still offers a wide range of coverages, including personal property, liability, and loss of use coverage.