What is an HO-6 policy? The homeowners policy form written for a condo or co-op unit: the interior the owner is responsible for, the contents, liability, and the owner's share of an association loss.
An HO-6 is the standard homeowners policy form for the owner of a condominium or co-op unit. It begins where the association's master policy stops, and the declaration decides where that is. A bare walls master policy covers the structure and the common elements and leaves the unit's drywall, flooring, cabinets and fixtures to the owner. An all-in or single-entity master policy also covers the fixtures and finishes as originally built, leaving the owner only what has been added since, plus contents. Finding which of the two the declaration names is the first step in buying the right amount of this policy rather than a round number somebody suggested.
Five things sit inside it: dwelling coverage on the interior the owner is responsible for, personal property, personal liability, loss of use while the unit cannot be lived in, and loss assessment. The last is the one owners meet late. It pays the owner's share of a charge the association levies after a covered loss, including the master policy's deductible where the declaration passes that through, and it is commonly written at $1,000 as standard with much higher limits available for a small addition to the premium. The premium itself is modest next to insuring a whole house, in public figures a few hundred dollars a year for a typical unit, because the building is not on this policy.
A lender financing a condo requires an HO-6 and wants both certificates before closing, this policy and the association's master. It is not an HO-3, the form on a detached house, which insures the whole structure. It is not an HO-4, the renters form, which covers a tenant's belongings and liability and no part of the building. The work worth doing here is matching the dwelling limit to what the CC&Rs actually make the owner responsible for, and setting the loss assessment limit against the master policy's real deductible rather than leaving it at the standard $1,000.
A worked example
A supply line fails in a 60-unit building and the association claims on its master policy, which carries a $15,000 deductible. The declaration passes the deductible through to the owners, so it is assessed across the 60 units at $250 each. An HO-6 with the standard $1,000 of loss assessment coverage pays that $250 in full. Had the association also levied $8,000 a unit for repairs the master policy did not cover, the same $1,000 limit would have left $7,000 on the owner.
Put dues and insurance into a monthly payment
Questions people ask
Is an HO-6 policy required to buy a condo?
Not by law, but by the lender in almost every financed purchase, and often by the association's governing documents as well. The lender wants a certificate before closing showing the dwelling limit, the liability limit and the loss assessment coverage.
What is the difference between an HO-6 and renters insurance?
An HO-6 is for the unit's owner and carries dwelling coverage on the interior the owner is responsible for, plus loss assessment. Renters insurance, the HO-4 form, covers a tenant's belongings and liability and no part of the building, because the tenant owns none of it.