Why Every Condominium Unit Owner Needs an HO6 Policy

By Michael Valente, Sr. VP of Condominiums

As a condominium owner, it’s easy to assume that your association’s master insurance policy has you covered in the event of a disaster or damage. However, this assumption can lead to costly surprises when you discover that the master policy doesn’t protect your personal belongings,  in some cases interior finishes, or covers damages below the association’s deductible. That’s where an HO6 policy comes into play.

What Is an HO6 Policy?

An HO6 policy is a specialized insurance policy designed for owners of condominium units. It works in tandem with your association’s master insurance policy to fill in the gaps, providing coverage for aspects of your unit and belongings that the master policy does not.

Gaps in Coverage from the Master Insurance Policy

Most condominium associations maintain a master insurance policy, but its scope is limited. Typically, the master policy covers the building’s structure, common areas, and liability for incidents in shared spaces. It does not cover:

• Personal belongings: Items such as furniture, clothing, electronics, and appliances are not included.
• Damages under the deductible: Many master policies have high deductibles—often $10,000 or more—leaving unit owners responsible for smaller losses that fall below this threshold.
• Personal liability: If someone is injured inside your unit, the master policy does not provide coverage for medical or legal expenses.

Without an HO6 policy, these gaps could leave you financially vulnerable.

Key Coverages an HO6 Policy Provides

An HO6 policy offers broad protection tailored to your specific needs as a condo owner. Some of the most critical areas it covers include:

1. Personal Property Protection:
   Your furniture, clothing, electronics, and other belongings are protected against damage from events like fire, theft, or water leaks.
2. Interior and Upgrades Coverage:
   An HO6 policy ensures that upgrades you’ve made to your unit are insured. If your master policy only covers original construction, you’ll need this coverage to replace things like high-end flooring or custom countertops.
3. Loss Assessment Coverage:
   If your association passes on costs for damages or liability that exceed the master policy’s limits, this coverage helps mitigate those expenses.
4. Deductible Coverage:
   HO6 policies cover the master policy’s deductible in the event of a claim. For example, if the master policy has a $25,000 deductible for water damage, your HO6 policy can help pay your share of that amount.
5. Loss of Use:
   If your unit becomes uninhabitable due to a covered loss, your HO6 policy can reimburse you for temporary living expenses like hotel stays or meals.

Affordable Protection for Peace of Mind

The good news is that HO6 policies are relatively affordable, often costing just a few hundred dollars annually. For this modest investment, you gain robust coverage that ensures you’re prepared for unexpected events.

Additionally, most lenders require proof of an HO6 policy when you finance the purchase of a condo unit. Even if it’s not mandatory, obtaining one is a smart financial decision to safeguard your assets.

Final Thoughts

Owning a condominium unit comes with unique responsibilities and insurance needs. While your association’s master insurance policy is a valuable safety net for the building and common areas, it’s not enough to protect your personal property, liability, or damages within your unit.

An HO6 policy bridges the gap, offering essential protection for your belongings, upgrades, and financial well-being. If you don’t already have an HO6 policy or haven’t reviewed your coverage recently, now is the time to act. Contact your insurance provider to ensure you’re adequately protected and prepared for the unexpected.  You should do this on a yearly basis to ensure your coverage is in line with that of the Master Policy.

Peace of mind is priceless, and an HO6 policy ensures that your condo ownership remains a secure and worry-free experience.  

By taking this proactive step, you’re not only protecting your investment but also ensuring that life’s surprises don’t disrupt your financial stability.

The above is not an official list but a guide to the importance of HO6 policies.  We highly recommend reaching out to your personal agent to review your current plan.