What is HO-6 condo insurance and how much does it cost?

An HO-6 condo insurance policy is homeowners insurance for condo owners and protects the condo owner.

While your association might have an insurance policy to cover common areas and structural damage, you’ll need additional coverage to protect the interior of your unit, your personal property, and against potential liability claims. Condo insurance does just that.

Below, we’ll explore what an HO-6 insurance policy is and what it covers.

What is HO-6 insurance?

An HO-6 insurance policy is homeowners insurance for those who live in a condominium or a co-op unit. This type of insurance includes coverage for damage to your condo unit, damage to your belongings, liability claims, and more. 

Because condo owners are not responsible for the entire structure, an HO-6 policy includes far less dwelling coverage (commonly called building property coverage) than a home insurance policy.

Is condo insurance required?

Like homeowners insurance, condo insurance isn’t legally required. However, the lender typically requires condo owners with a mortgage on their property to purchase HO-6 insurance. 

Once you pay off your mortgage, you might have the option to skip condo insurance. However, some condo associations require owners to maintain a minimum level of coverage. 

What does HO-6 condo insurance cover?

HO-6 insurance coordinates coverage with your condominium or cooperative’s master policy. A standard HO-6 condo insurance policy covers several things:

• Dwelling or building property: Dwelling coverage, often called building property coverage on a condo policy, applies to structural and interior damage to your specific unit. It only covers the portion of the unit for which you are responsible, usually some or all of the interior. 
• Personal property: This is the bulk of a condo policy and covers all of your personal belongings, including dishes, linens, clothing, furniture and electronics.
• Personal liability: Liability coverage protects you when you are held responsible for injuries or damages to someone else. 
• Loss of use: If your condo is uninhabitable due to a covered loss, this coverage will help pay for additional living expenses during repairs. 

While the coverage is relatively robust, there are exclusions, and some types of personal property have special limits. For example, if you have high-value items such as jewelry, fine art or fancy computer equipment, you’ll need to consider extra personal property coverage. 

Consider buying replacement cost coverage for your personal property. If you don’t opt for the replacement cost, your insurance policy will likely only cover the actual cash value of your home’s contents, which is often considerably less money than you would need to replace your belongings.

“Documenting and valuing every item from furniture to personal belongings, and factoring in the cost of potential upgrades or remodels you’ve done, ensures your coverage matches your actual needs,” says Scott Friedson, public adjuster and CEO of Insurance Claim Recovery Support. 

Remember that the replacement cost in the future may be higher than the purchase price today.

“It’s not just about covering the present value but considering the replacement cost, as this will significantly influence how much insurance you require to fully protect your investment and belongings. In my experience, a detailed inventory and regular policy reviews are best practices for keeping your coverage aligned with your current needs,” Friedson says.

Condo owners with significant assets might consider purchasing additional liability coverage to protect themselves if they are responsible for injuries to someone else or damage to their property. 

Depending on where you live, you might also need additional coverage for earthquakes, floods or windstorms.

What doesn’t HO-6 condo insurance cover?

An HO-6 policy provides coverage for a condo unit and any personal property inside it. However, there are some things that an HO-6 policy does not cover: 

• Wear and tear
• Flooding
• Earthquakes
• Damage caused by termites or other infestations
• Exterior damage
• Roof damage
• Policyholder’s medical expenses
• Damage to common areas such as hallways or lobbies

What does the condo association’s insurance policy cover?

A condominium master policy is something that your condo building HOA buys as a single entity. In general, a basic condo master policy covers:

• General liability for the association
• Property damage coverage for the common areas

There are several types of condo master policies, and the type your association has will determine how much coverage you need. The options are:

• Bare walls: Limited to the basic structure of the building, including fixtures and furnishings collectively used
• Single entity: Covers the building structures, common areas and fixtures in individual units, but not personal property or improvements
• All-in or all-inclusive: Covers the structure, fixtures in individual units and additional upgrades made by you or a previous owner.

If something isn’t covered in the master policy for your building, you’ll need to compensate for that with a more robust policy of your own. 

As a condo owner, you have shared spaces to consider, which is where loss assessment coverage comes in. It pays for repair costs that are shared among the unit owners and would otherwise need to be paid out of pocket.

What type of damage does condo insurance cover?

Most HO-6 condominium owner policies are named perils policies. That means they cover damage from the perils listed in the policy. Perils not listed are excluded. The 16 perils covered by an HO-6 policy are:

• Fire 
• Lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Damage caused by aircraft
• Damage caused by vehicles
• Smoke
• Vandalism or malicious mischief
• Theft
• Volcanic eruption
• Falling objects
• Weight of ice, snow, or sleet
• Accidental discharge or overflow of water or steam from plumbing, heating, air conditioning, or automatic fire-protection sprinkler system, or from a household appliance.
• Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system.
• Freezing of plumbing, heating, air conditioning, fire-protective sprinkler system, or of a household appliance.
• Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component)

However, some HO-6 policies are open perils, which means they cover anything that isn’t specifically excluded. Be sure to ask what type of coverage you are buying.

How much HO-6 insurance costs

The cost of condo insurance depends on many factors, such as where you live and how much coverage you need.

The average condo insurance cost nationwide is $795, for $60,000 in personal property coverage, with a $1,000 deductible.

Florida has the highest average condo insurance rates at $1,610 a year. Extreme weather conditions like hurricanes and strong storms are responsible for these high rates.

The weather is a major factor in those costs. Florida is prone to hurricanes and strong storms. Insurers view condos in that state, especially on the coast, as a higher risk than states like Alaska, Alabama, Arizona or California, which have the lowest average condo insurance rates.

You can’t completely offset higher rates in your state, but you can lessen the blow by shopping around. Get quotes for the same level of coverage from at least three home insurance companies. Make sure you ask about discounts, including bundling discounts.

Condo insurance cost by state

Factors affecting the cost of HO-6 insurance

The cost of your HO-6 insurance policy varies based on your unique situation. Location is one of the biggest factors, which is impacted by your state and specific ZIP code. Other factors that can impact your costs include your coverage choices, the condition of your unit, fire safeguards in the building, and your claims history. 

How much condo insurance do I need?

The amount of condo insurance coverage you’ll need depends on what the condo association master insurance policy covers. If the master policy is a bare-walls policy, you’ll need more coverage. But, if the condo association’s insurance is an all-in or all-inclusive policy, you may not need quite as much coverage. Determining how much condo insurance you’ll need can get tricky for this reason.

We recommend speaking with your insurance agent to discuss the master policy and what you need in an HO-6 policy to fill all the gaps.

Optional condo insurance coverage

You can choose to add optional coverage to your condo insurance policy for more protection. However, these coverages may not be available everywhere. Contact a local agent to learn what is available in your area.

• Water backup: Water backup insurance helps you pay for repairs in your unit caused by water coming from the drains or sump pump.
• Personal injury: Personal injury coverage helps pay for legal fees and damages if someone sues you for libel or slander.
• Identity theft: This coverage helps pay for legal bills and lost wages if someone steals your identity or if you have to deal with fraud. You can also get a specialist to help you through this process.
• Extended coverage for personal property: Extended coverage for personal property offers increased coverage limits for valuable belongings, such as jewelry, cameras and antiques. 
• Flood: If your condo unit is damaged in a flooding event, that’s not covered by an HO-6 policy. You will need to purchase a flood insurance policy.
• Earthquake: An earthquake could cause significant damage that isn’t covered by an HO-6 policy. If you live in an earthquake-prone area, consider adding earthquake insurance. 

How to buy condo insurance

You can purchase HO-6 insurance through an insurance agent or broker. You can also buy HO-6 insurance directly online from many companies. Read the insurance company’s reviews online before purchasing a policy and follow these steps to get an HO-6 policy:

• Step 1: Determine the value of your personal belongings. This includes everything from furniture and clothing to electronics and art. Be sure to get an accurate estimate of the replacement cost, as this will be used to determine the amount of coverage you need.
• Step 2: Get quotes from multiple insurers. Standard coverage doesn’t vary much from one company to the next for an HO-6 policy, but rates and customer service do, so shop around for home insurance quotes from at least three different companies.
• Step 3: Compare rates and coverage. Compare the rates and be sure to ask about any discounts available, such as bundling your condo insurance with other types of coverage.
• Step 4: Review the policy. Be sure to carefully read the terms and conditions of any policy before purchasing it. This will help you avoid any surprises down the road.

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