Condo Insurance Guide (HO-6)

Owning a condominium offers the benefits of homeownership without the burden of exterior maintenance. But when it comes to insurance, condo ownership is unique. You don't need a standard homeowners policy, because you don't own the entire building. Instead, you need a specialized policy known as an HO-6.

This guide explains how condo insurance works, how it interacts with your Homeowners Association (HOA), and exactly what you need to protect your investment.

The Master Policy vs. Your HO-6 Policy

When you buy a condo, a portion of your monthly HOA dues pays for a "Master Insurance Policy." Understanding what this master policy covers is the first critical step in determining how much personal condo insurance you need.

To see how this compares to other types of residential policies, review our Home Insurance Comparison Guide.

Decoding the Master Policy: Bare Walls vs. All-In

Not all master policies are created equal. You must read your HOA's bylaws or ask the association's insurance agent to determine which type of master policy is in place. This dictates how much "dwelling coverage" you need on your HO-6 policy.

• "Bare Walls" Master Policy: This policy covers exactly what it sounds like—only the bare walls, floor, and ceiling structure. It does not cover anything inside the unit, including sinks, cabinets, flooring, appliances, or electrical fixtures. If your HOA has a bare walls policy, you need a substantial amount of dwelling coverage on your HO-6 policy to rebuild the interior from scratch.
• "All-In" Master Policy: This policy covers the original fixtures, installations, and appliances as they were built by the developer. It usually covers standard flooring, cabinetry, and plumbing. In this case, you only need enough HO-6 dwelling coverage to pay for any upgrades or renovations you (or a previous owner) made.
• "Single Entity" Master Policy: Similar to all-in, but specifically excludes any upgrades or improvements made after the original construction.

Key Coverages in an HO-6 Policy

Once you know what the master policy covers, you can structure your individual HO-6 policy.

1. Dwelling Coverage (Coverage A)

As discussed above, this pays to repair or rebuild the interior of your unit. Calculate the cost to rebuild your interior, minus what the master policy covers.

2. Personal Property Coverage (Coverage C)

This covers your furniture, clothing, electronics, and other belongings. Whether a fire destroys your unit or a thief breaks in, this coverage pays to replace your items. Always opt for "Replacement Cost" coverage rather than "Actual Cash Value."

To ensure you purchase enough coverage, take the time to document your belongings using our Home Inventory Checklist.

3. Personal Liability (Coverage E)

If a guest trips over a rug in your living room and breaks their arm, your liability coverage pays for their medical bills and defends you if they sue. It also covers damage you accidentally cause to other units. For example, if your bathtub overflows and ruins the ceiling of the condo below you, your liability coverage handles the neighbor's repair costs.

4. Additional Living Expenses (Coverage D)

If a fire severely damages your building and you cannot live in your unit for three months while it is repaired, this coverage pays for your hotel bills, restaurant meals, and other extra costs.

5. Loss Assessment Coverage (Crucial for Condos)

This is a unique and vital coverage for condo owners. If a severe hailstorm causes $500,000 in damage to the building's roof, but the HOA master policy only covers $400,000, the association will issue a "special assessment" to all unit owners to cover the $100,000 shortfall. If there are 50 units, you owe $2,000. Loss assessment coverage pays this bill for you.

How Much Does Condo Insurance Cost?

Because you are only insuring the interior of the unit and your belongings, condo insurance is significantly cheaper than standard homeowners insurance, though usually slightly more expensive than renters insurance.

The average HO-6 policy costs between $300 and $600 per year, depending on the value of your belongings, your location, and the type of master policy your HOA carries.

If you are considering renting out your condo, your insurance needs will change again. For details on tenant coverage, see our Renters vs. Homeowners Insurance Guide.

Frequently Asked Questions