Buying insurance for your condo is an important tool to protect your belongings from unexpected losses. One of the most important policies you can purchase is an HO6 policy that insures individual unit owners. It can be tempting to skip the research and just buy the cheapest policy, but remember that these policies provide various levels of coverage. If you buy only on price, and your agent sells you a “cheap” policy, you are going to be sorry when you have a loss.
What Is an HO6 Policy?
HO6 insurance is homeowner’s insurance specifically designed for condominium owners. It covers your personal belongings, like furniture and clothes, as well as improvements you make to your unit. HO6 policies also offer liability protection, in case you are found liable for property damage or injury while someone is on your property.
Unlike standard homeowners insurance, HO6 policies do not cover the building itself or the common areas of the condominium complex. This is because the condo association typically maintains insurance for these parts of the building.
Is HO6 Insurance Mandatory for Condo Owners?
While not mandatory, HO6 insurance provides extremely valuable protection for your personal belongings, and it is strongly recommended. Your condo association’s insurance covers the main structure; it does not, however, cover the interior of your unit. This can leave you financially vulnerable in case of disasters that destroy not only structures but your property.
The very first step in buying the right HO6 policy is to request a copy of your condo’s Declarations. The author of 10 Steps to a Well-Designed HO6 Policy suggests you read the policy and “make a list of building items not covered by the master policy (e.g., carpet, hardwood floors, tile floors, kitchen cabinets, plumbing and electrical fixtures, built-in appliances, unit owner improvements, etc.).” This article is written for insurance agents, but we recommend that all policyholders review the steps and discuss the coverages with their agents.
What Is the Difference Between HO3 and HO6 Insurance?
While HO6 insurance is for condos, HO3 insurance is typically for single-family homes. An HO3 policy covers the entire structure of a home, while HO6 only covers the individual unit within a condominium complex. HO6 insurance does not cover the structure where the unit is located or any “common elements” of the dwelling. (The condo association’s Declarations lay out what is considered a common element.)
What Is Special Coverage A on a Condo Policy?
In Florida, Special Coverage A is an endorsement that changes your HO6 policy from a named perils policy to an all-risk policy. According to the “10 Steps” author, it’s an important endorsement for three reasons: “It covers more losses (e.g., water damage to walls and ceiling from roof leaks), it improves coverage for losses subject to the master policy deductible, and it changes the perils covered by loss assessment coverage from named to special.”
What Does HO6 Insurance Not Cover in a Condo?
HO6 Insurance doesn’t cover the shared parts of the condo dwelling. This includes:
- The building structure, including exterior walls, roof, and foundation
- Common areas of the complex like hallways or pools
- The land on which the complex is located
Depending on your condo’s Declarations, you likely also want to add special perils contents coverage for roof leaks or paint spills, as well as sewer backup coverage in case of direct damage to your unit from a sewer backup.
HO6 coverage also doesn’t include earthquake or flood protection by default; if you’re in an area at risk of these events, you should add coverage, as well as coverage for loss assessments that your association might levy in response.
What Is Loss Assessment Coverage?
Loss assessment coverage is a type of insurance that protects you as a condominium unit owner from having to pay out-of-pocket for unexpected assessments levied by your condo association. If a disaster strikes the community and causes a loss, the association may conduct a loss assessment of all unit owners to cover repairs. Loss assessment coverage helps you pay for those assessments; to stay protected, you should seek out a policy with a limit of $50,000.
Further Resources on Insurance Coverage Law
Navigating the complexities of insurance claims can feel overwhelming. Whether you’re facing unpaid claims or simply filing for the first time, our eBooks equip you with the crucial information you need to advocate for yourself with confidence.
- Filing A Property Insurance Claim
- Insurance Company Response Time
- What To Do When You Have a Denied/Underpaid Claim
- Wildfire Claims
- Flood Claims Handbook
- More Information on Hurricane Deductible and Policy Limits
- Condominium Hurricane Preparedness
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