What is Condo (HO6) Insurance? What Does it Cover?

Updated Sep 5, 2023

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Also known as an HO-6 policy, condo insurance protects condo and co-op units and provides personal liability coverage and living expense coverage if it becomes uninhabitable.

HO-6 policies are called "walls-in coverage" because they protect individual units, while the master policy of your condo or co-op association covers the building's common areas.

However, standard condo insurance doesn't apply in certain situations, such as floods. You may want to consider extra policies, depending on where your condo is and how much time you spend there.

What is covered by the condo association or HOA master insurance policy?

Typically, all common areas in a condominium building are covered under a master insurance policy owned by the condo association or homeowners association (HOA) unless the bylaws state otherwise. This includes the building's roof and exterior and internal areas such as elevators and hallways.

The cost of the master policy is shared by all unit owners, usually in the form of recurring condo or HOA fees. There are three main types of condo master insurance policies:

Bare walls coverage is a limited master insurance policy that covers the structure, as well as most fixtures and furnishings in common areas. It also covers any property collectively owned by the condo association.
Single entity coverage offers everything included in bare walls coverage plus coverage for built-in property, such as fixtures in individual condo units.
All-in coverage applies to all property collectively owned by the condo association or that's part of the condominium structure. It's the most comprehensive condo master insurance policy, covering all improvements and additions.

The type of master insurance policy your HOA or condo association has directly impacts the amount of condo insurance you need to buy.

Ask the association for a copy of its declaration page, which details the policy and what it covers.

Condo associations may also have other forms of commercial insurance, such as a fidelity insurance policy to cover issues with employee dishonesty, but they don't typically relate to your own insurance needs.

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What does condo insurance cover?

A typical condo insurance policy covers the following categories:

Building property: The unit itself, including walls and fixtures
Personal property: Furniture, electronics and other movable goods
Personal liability: Legal expenses from claims or lawsuits against you
Loss of use: Costs of lodging/transport if your unit becomes uninhabitable
Loss assessment: Your portion of any losses shared by the association

The main difference between a condo owner's HO-6 policy and a regular HO-3 homeowners insurance policy is that an HO-6 only covers the interior structure of a unit, from the walls in. Otherwise, HO-3 and HO-6 policies are quite similar in how they cover personal property, liability and additional living expenses.

Usually, the dwelling and property coverage for a condo includes a defined list of named perils, such as fire, hail, theft and vandalism. Any hazards not named are not covered, so you're financially responsible for those types of damage.

But it's possible to turn your condo insurance into an "open peril" policy by adding a Unit Owners Special Coverage A endorsement. An open peril policy covers damage from any cause except those named in the policy — typically, flooding, earthquakes and sinkholes.

Flooding is usually an excluded peril in both condo and homeowners insurance.

Condo building property coverage

The division of ownership and insurance coverage between condo owners and condo associations can present tricky questions when damage affects more than one area of a building.

Condo insurance building property coverage protects your unit's interior, including the floor, interior walls, cabinetry, sinks, tiling and any other permanent fixtures. If your condo is damaged or completely destroyed by a covered peril, your insurance will pay up to the coverage limit of the policy. This is usually equal to the full cost of replacing the unit.

Depending on what areas are affected, an incident can be covered by multiple policies. A leaky roof — covered by the master policy — might also cause water damage to your unit below, which would bring your HO-6 policy into play. Similarly, water damage in a neighbor's unit that spreads to yours would involve two HO-6 policies.

When choosing your dwelling coverage limit, consider the added value of any new fixtures or construction.

For example, say you renovate your kitchen, adding new finishes and upgrading the fixtures. This increases the value of the interior and may put your overall home value above your old dwelling coverage limit.

Condo contents and personal property insurance

Your belongings are protected by the personal property (or contents) coverage in an HO-6 insurance policy. Like homeowners insurance, condo insurance will help replace any property belonging to the condo owner or family members in the event of a covered loss, up to the policy limit. Covered property can include furniture, clothing, electronics and any other items not permanently attached to the unit.

Typically, the limit for property claims is about 50% of the limit for dwelling coverage.

Like the structure itself, your belongings are covered for a long list of perils. The most important are fire, lighting and theft.

For example, if a storm breaks a window in your condo, letting rain in that soaks your furniture, a condo insurance policy would pay to replace both the window (structure) and the furniture (personal property).

Personal property coverage isn't limited to things located inside the condo unit. You could file a claim for belongings that are lost, damaged or stolen outside or while traveling. For example, if something is stolen from your car, you could file a condo insurance claim.

Condo liability insurance

Condo liability insurance protects you and your family members from lawsuits for bodily injury or property damage. It's a core part of every condo, homeowners, and renters insurance policy. Without liability coverage, you could be stuck paying out of pocket for legal expenses that could be financially devastating.

Most condo insurance policies include at least $100,000 in liability coverage. You can always buy more, usually up to $500,000. If you need even more coverage, you can also get an umbrella policy to supplement the liability limit of your condo insurance.

Loss of use coverage

Loss of use coverage (sometimes called additional living expense coverage) isn't as well known as property or structural coverage, but it can be extremely valuable. If your condo becomes uninhabitable due to damage or an evacuation order, loss of use coverage reimburses you for the extra expenses you incur to keep your standard of living.

For example, say there's a fire in your condo, leaving you without a place to stay. Loss of use coverage will pay for your room and board at a different location while the condo's repaired — and will sometimes even cover the extra costs of a longer commute.

The terms for loss of use can vary: Some policies reimburse you up to a certain amount each day or for a set number of days, while others allot a maximum amount per claim.

Loss assessment coverage

Loss assessment insurance, also called special assessment coverage, is an optional add-on to condo insurance. It covers situations in which condo unit owners are financially responsible for a shared loss, as long as the issue is a covered peril.

For example, if a fire were to damage the lobby of your condo building and cost the association more than it has set aside, then special assessment coverage will pay your share of the difference.

Co-op insurance

If you live in a co-op instead of a condo, you should still get a condo insurance (HO-6) policy. The coverage needs are usually the same, but you should still check your building's master policy to see exactly what it covers.

If your building only has bare walls coverage, any upgrades you make will likely not be covered by the master policy. Examples of this might include new kitchen appliances or new countertops. So your condo/co-op policy will have to cover everything inside the walls of the unit.

The main difference between a condo and a co-op is that if you have a condo, you own a unit inside a larger building, while in a co-op, you own a part of the building and lease your unit from it. There is no hard line of what will be covered by a condo policy or your building's master policy, but what those policies cover can differ by what building you live in.

Flood and earthquake insurance for condos

Condo insurance does not cover damage related to earthquakes, floods or sinkholes. You'll typically need to buy separate coverage if you live in an at-risk region. You may also be required to get certain extra coverages, such as flood insurance, as a mortgage requirement.

Vacant condo insurance

If your condo is vacant for an extended time — typically at least 30 consecutive days — your insurance may not cover claims for damage that occurs while vacant. Insurance companies consider unoccupied and vacant properties higher risk, since issues may not be addressed quickly and break-ins are more likely.

To ensure your property stays covered, you can buy vacant condo coverage from your insurance company when you intend to be away for more than a month. This often costs extra, but the alternative is to bear the full risk of theft or a peril destroying your property.

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