What is HO-6 insurance?

While a homeowners insurance policy covers single-family homes, condo insurance (also called an HO-6 policy) covers condominium units. 

Unlike homeowners, condo owners usually don’t have to insure the entire building and common areas. That’s the job of your condo association’s master policy. 

Instead, an HO-6 insurance policy protects the inside of your condo unit. Also, this insurance covers liability, medical expenses for injured guests, and alternative living accommodations if your condo is uninhabitable.

What does condo insurance (HO-6) cover?

The standard condo policy includes the following insurance coverages:

• Dwelling coverage protects the inside of your individual unit, like your wall coverings, floor coverings, and built-in fixtures as well as upgrades and improvements you make to these, depending on your condo association’s master policy. 

• Personal property coverage is for your personal belongings, like furniture, appliances, clothing, and decor.

• Loss of use coverage pays for additional living expenses (e.g., dining out, hotel stays, and pet boarding) if you temporarily relocate after a covered loss. 

• Personal liability coverage helps with your legal defense if someone gets hurt in your condo or you accidentally cause property damage (for example, in common areas).

• Medical payments coverage handles your guest’s medical bills after a minor injury in your condo unit.

A condo insurance policy typically covers your dwelling on an open peril basis. In other words, it pays for damages caused by all events except those explicitly excluded in your policy. Some covered common perils include wind, fire, theft, vandalism, and falling objects.

Another common component of an HO-6 policy is loss assessment coverage or special assessment coverage. If a covered incident damages a shared area and the condo association requires a special assessment of all unit-owners to cover the cost of repairs, this coverage helps take care of your share of the extra cost. 

What does condo insurance (HO-6) not cover?

An HO-6 policy doesn’t cover the entire condo building – that’s where the condo association’s master policy kicks in. 

Condo insurance also has lesser-known exclusions. Like a standard home insurance policy, condo insurance doesn't cover:

• Floods. Condo insurance doesn’t cover water damage from water flowing into your condo, but a flood policy from the National Flood Insurance Program (NFIP) or a private insurance company does.

• Earthquakes. Insurance excludes coverage for losses due to earth movement, like landslides, mudslides, and sinkholes.

• Neglect and improper maintenance. Condo owners should conduct routine maintenance on their property because insurers don’t cover claims due to poor upkeep. 

• Wear and tear. Condo insurance companies exclude damage caused by regular wear and tear. You might want to look into a home warranty for your condo if this is a concern.

• Pest infestations. Insurers exclude coverage for infestations caused by termites, rodents, and other pests, as homeowners can generally prevent them.

Condo insurance also excludes some rarer scenarios. For example, most insurers don’t cover damage caused by nuclear hazards, acts of terrorism, civil riots, and government actions.

How much is condo insurance (HO-6)?

Condo insurance costs an average of $531 per year, based on a 2021 report from the National Association of Insurance Commissioners (NAIC). Your HO-6 insurance premiums depend on your: 

• Location. Your area's exposure to risks like crime, natural disasters, and fires can all impact your policy's premiums. Additionally, areas with a high cost of living may also see higher condo insurance premiums, if only because repairs will be more expensive.  

• Coverage. If your policy's limits are higher or include additional coverage, you pay more for insurance. Choosing a lower deductible also increases your premiums, but it reduces out-of-pocket costs if you need to file a claim. 

• Condominium. Insurance companies consider your condo's age, value, materials, and home contents when assessing your unit's risk factors and premiums.

• Insurance score. Some states allow insurers to use a credit-based insurance score when determining your premium. The score predicts your risk of filing an insurance claim, and a better one often leads to lower rates. 

• Claims history. Insurers may see you as more risky to insure if you’ve filed multiple claims in the past. When they do, they charge you more for your policy.

• Discounts. Discounts save you more money on your HO-6 condo insurance policy.  The more discounts you qualify for, the lower your rates will be. 

How much condo insurance do you need?

The amount of condo insurance coverage you need mostly depends on how much it costs to rebuild your condo and replace your items after a covered claim. Most policyholders carry the following coverage limits.

Is condo insurance (HO-6) required?

Condo insurance isn’t required by law, but if you have a mortgage on your condo, most mortgage lenders require it. Your condo association may also mandate coverage with minimum coverage and limits. 

Even if you aren’t required to carry HO-6 condo insurance, it’s still a good idea to have it. An unexpected disaster can strike when you least expect it. Insurance prevents financial strain when recouping your losses. 

How to get condo insurance

If you’re looking for condo insurance, these tips can help you find the right pick:.

• Review your condo’s master policy: There are three types of master policies: all-in, single entity, and bare-walls coverage, from most to least comprehensive. You can find this information on your condo’s declaration or bylaws page or by speaking to the association or property manager. Then you can purchase coverage based on gaps in the condo's master policy.

• Determine the amount of coverage you need: The amount of personal liability coverage you need depends on your individual circumstances and your tolerance for risk, but one rule of thumb is that your personal liability should at minimum be roughly equal to your net worth (i.e., your assets, like your condo value, savings, and investments, minus your liabilities or debt, like your mortgage, auto loans, and outstanding taxes).

• Consider other coverage options: Standard condo insurance doesn't cover everything, so you may want to purchase additional protection. For example, if you own high-value items like jewelry or electronics, add a personal property floater.

Having this information on hand when you talk to an insurance agent or apply online for a condo insurance quote can make the process much easier.