The HO-6 form of homeowner’s insurance is also known as condo insurance. Just because people own property doesn’t mean that it’s a freestanding structure. Many people purchase condos, both as primary residencies and for vacation homes, and they need insurance as well. This requires a specific form of insurance because while you still own the property, it’s part of a larger building that is maintained by an association normally. So what an HO-6 policy does is insure the interior of the unit and personal property that’s inside.
HO6-Home Insurance Coverage
When you purchase a condo, there is already going to be a master association policy that will insure the entire building up to a certain amount of coverage but it’s a good idea to invest in an additional layer of protection. An HO-6 condo policy pulls from all the rest of the other forms. The most important thing to note is that similar to an HO-3 homeowner’s policy, it has broad coverage on both building (meaning the inside of the unit for you) and personal property. This means that your unit and its belongings are covered under 16 different circumstances listed below:
- fire or lightning
- wind storm or hail
- riot or civil commotion
- vandalism or malicious mischief
- volcanic eruption
- falling objects
- weight of ice, snow, or sleet
- accidental discharge or overflow of water or stream
- sudden and accidental tearing apart, cracking, burning, or bulging
- sudden and accidental damage from artificially generated electric current
Purchasing a condo can be the best of both worlds. You own your particular unit so you are able to build equity but you also have an association that is going to take care of things like roof repairs and building maintenance. This can be a great compromise for many different people but don’t think that the main association will take care of everything for you. While they will have an overall building insurance policy, it doesn’t cover anything in your personal unit. The main things the building insurance policy cover is common areas like hallways, basements, and elevators.
So buying an HO-6 policy for your condo is a very wise idea. In addition to the perils listed above that it covers, it can also cover some additional extras that a regular homeowner’s policy might not include. Your HO-6 policy will cover damage to your personal property and your interior walls and floor coverings. This is fairly standard but it can also help pay for certain types of improvements and upgrades. If you invest in your particular unit, you are raising the inherent value of the building. Another very important thing an HO-6 policy does is fill in where the master insurance policy leaves off. This is also known as gap coverage. Many main condo insurance policies have very high deductibles and if certain losses fall below that very high deductible (of which there’s a good chance) the unit owner is responsible for the losses. This can come as a shock but if you have the right amount of HO-6 insurance, it can help fill in where the master leaves off.
The HO-6 also contains personal liability insurance which can be priceless if someone tries to sue you. This is a great investment because it follows you instead of residing solely with the condo. If you accidently hurt someone with a power tool while you’re volunteering at a house building project, your personal liability insurance can help take care of their medical payments. This alone is worth purchasing the HO-6 form of homeowner’s insurance.
Luckily, you won’t have to pay a lot of money. Of course your premiums are going to depend on how much coverage you purchase, which is determined by the value of your property and belongings. No matter what you, you must make sure that your purchase enough coverage to replace the interior of your unit as well as the bulk of your belongings. If you have no condo insurance and a fire completely wipes out your part of the building, the association will build up the exterior of the building but you would be responsible for the materials located within the studs.
When you purchase your condo, whether it’s a first time home or a vacation spot, sit down your insurance agent to determine just how much coverage you need. It’s a decision you won’t regret.