Buying a condo means sharing ownership of a building with your neighbors, and that shared ownership also shapes your insurance. The condominium association carries a master policy, but it rarely covers everything inside your unit or every bill that could come your way. HO-6 insurance, the standard form for condo unit owners, fills those gaps. This guide explains what an HO-6 policy covers, how it interacts with the master policy, and how to choose coverage limits that actually protect you.
How condo insurance is divided
Insurance for a condominium is split between the association and the individual owners. The association’s master policy covers common elements such as the roof, exterior walls, hallways, elevators, lobbies, and amenities. Your HO-6 policy covers your personal property, your personal liability, and some or all of the structure inside your unit, depending on what the master policy leaves out.
The dividing line is set by your association’s governing documents, usually the declaration or the bylaws, along with state condominium law. Before buying a policy, ask the association or its management company for a copy of the master policy declarations page and the section of the governing documents describing insurance responsibilities.
Types of master policies
Master policies tend to fall into three broad types:
- Bare walls. The association covers the building structure but not anything inside the unit’s perimeter walls. You need coverage for drywall, flooring, cabinets, fixtures, and appliances.
- Single entity. The association covers the structure and the original fixtures inside units, such as builder-grade cabinets and countertops, but not upgrades you made.
- All-in. The association covers fixtures and improvements inside units, including many upgrades. You still need coverage for personal belongings and liability.
The type determines how much dwelling coverage you need on your own policy.
What an HO-6 policy covers
Dwelling coverage (Coverage A)
Often called walls-in coverage, this pays to repair or rebuild the parts of your unit you are responsible for, such as interior walls, floors, built-in cabinets, plumbing fixtures, and improvements like a remodeled kitchen. Choose a limit that reflects the cost to rebuild those components at current contractor prices, not the market value of the condo.
Personal property (Coverage C)
This covers furniture, clothing, electronics, and other belongings against covered perils such as fire, smoke, theft, windstorm, and certain types of water damage. Many HO-6 policies insure personal property on a named-perils basis, meaning only perils listed in the policy are covered. Some insurers offer open-perils coverage for an extra cost. Ask whether the policy pays replacement cost or actual cash value. Actual cash value subtracts depreciation, so a five-year-old television may be worth only a fraction of the price of a new one.
Loss of use (Coverage D)
If a covered loss makes your unit uninhabitable, loss of use pays additional living expenses such as a hotel or a short-term rental, plus extra costs for meals above your usual spending. If you rent the unit out, it can cover lost rental income.
Personal liability (Coverage E)
Liability coverage protects you if someone is injured in your unit or if you accidentally damage someone else’s property. A common example is a washing machine hose that bursts and floods the unit below. Liability coverage can pay for the neighbor’s damage and your legal defense. Limits commonly start at $100,000, but many advisers suggest $300,000 or more, especially if you have significant assets.
Medical payments (Coverage F)
This pays modest medical bills for guests injured in your unit regardless of fault, typically a few thousand dollars per person.
Loss assessment coverage
This is one of the most important and most overlooked parts of a condo policy. When the association suffers a covered loss that exceeds its master policy limits, or when the master policy has a large deductible, the association can assess each owner a share of the cost. Loss assessment coverage reimburses your share.
Master policy deductibles have grown, particularly in areas exposed to hurricanes and hail, where deductibles may be a percentage of the building value. A 5% windstorm deductible on a large building can mean a seven-figure shortfall split among owners. Many HO-6 policies include only a small amount of loss assessment coverage by default, such as $1,000. Increasing it is usually inexpensive. Check whether your policy’s loss assessment limit applies to deductible assessments, because some forms limit how much they pay toward the master policy deductible.
Gaps worth closing
- Water backup. Damage from a sewer or drain backup is typically excluded unless you add an endorsement.
- Flood. Standard HO-6 policies exclude flood. Condo owners in flood-prone areas can buy a separate unit-owner flood policy through the National Flood Insurance Program or private carriers.
- Earthquake. Earthquake damage requires a separate policy or endorsement in most states.
- Valuables. Jewelry, watches, and collectibles often face low theft sublimits. Scheduling them on a rider raises those limits.
- Improvements. If you renovated, update your dwelling limit. An all-in master policy may cover original fixtures, but upgrades are often your responsibility.
- Rental use. If you rent the unit out on a short-term or long-term basis, tell your insurer. Some policies exclude or limit coverage for rental activity without an endorsement.
How to choose your limits
- Read the governing documents to confirm what the master policy covers.
- Estimate walls-in rebuild costs. For a bare-walls policy, estimate the cost to replace flooring, drywall, cabinets, counters, and fixtures. A contractor or the insurer’s estimating tool can help.
- Inventory your belongings. Photos, receipts, and a simple spreadsheet make it easier to choose a personal property limit and to file a claim later.
- Match loss assessment to the master deductible. Ask the association for the master policy deductible amounts and choose a loss assessment limit that would cover your share.
- Set liability above your net worth exposure, and consider a personal umbrella policy if you have substantial assets.
- Choose a deductible you can afford. A higher deductible lowers the premium but increases what you pay per claim.
What HO-6 insurance costs
Premiums vary widely by state, building age, construction, claims history, location, and coverage limits. Condo coverage generally costs less than a standard homeowners policy because the association insures the building shell. Your credit-based insurance score may also affect the price in states that allow its use. Compare quotes from several insurers, and ask about discounts for bundling with auto insurance, installing water leak sensors, and having a monitored alarm.
Is HO-6 insurance required?
No federal law requires condo insurance, but most mortgage lenders require it when the master policy does not cover the unit interior, and many associations require owners to carry a minimum policy. Fannie Mae and Freddie Mac guidelines also address condo coverage for loans they purchase. Even if you own your unit outright, going without coverage leaves your belongings, your interior finishes, and your liability unprotected.
Filing a claim
When damage occurs, notify both your insurer and the association promptly. Take photos, prevent further damage where it is safe to do so, and keep receipts for emergency repairs. In water damage cases, the source matters: a leak from a common pipe may be the association’s responsibility, while a leak from your dishwasher is likely yours. Your insurer may also pursue recovery from a neighbor whose unit caused the damage.
Related reading: Pet Insurance Explained: How Policies Pay, What They Exclude, and Whether It Pays Off and GAP Insurance for Cars: When You Need It, Where to Buy It, and How Claims Are Paid.
Frequently Asked Questions
What does HO-6 insurance cover?
An HO-6 policy covers your unit’s interior structure that the association does not insure, your personal belongings, additional living expenses after a covered loss, personal liability, and guest medical payments.
Does the HOA master policy cover my unit?
It covers common elements and, depending on its type, some or all of your unit’s interior. Bare-walls policies cover none of the interior, while all-in policies cover fixtures and often improvements.
How much loss assessment coverage do I need?
Enough to cover your share of the master policy deductible and possible shortfalls. Ask the association for its deductibles and your ownership percentage, then set a limit to match.
Does condo insurance cover flooding?
No. Flood is excluded from standard HO-6 policies, so you need a separate flood policy if you face flood risk.
Is condo insurance required by law?
There is no general legal mandate, but lenders and associations commonly require it.
This article is for general informational purposes only and is not legal, medical, tax, or financial advice. Rules vary by state and change over time; confirm details with the relevant agency or a licensed professional.
