Condo and co-op insurance (HO-6) explained

If you own a condo or co-op, you don’t need a standard homeowners policy. You need an HO-6 — a condo policy that covers the parts of your unit that the building’s master policy doesn’t.

Most condo owners don’t fully understand the split. This is where claim-time surprises come from.

The two-policy structure

When you own a condo or co-op, two policies are at play:

1. The master policy (building’s policy):

• Owned by the HOA or co-op corporation
• Covers the building structure, common areas, and shared elements
• Funded by HOA fees from all unit owners
• Has its own deductible — large losses may flow through to unit owners as special assessments

2. Your HO-6 policy:

• Covers what the master policy doesn’t
• Specifically: your unit’s interior, your personal property, your liability

The boundary between the two is defined by the master policy and the condo declaration.

Three master policy types

Bare walls in / studs in: the master policy covers the bare structure — exterior walls, roof, common spaces. Everything from the studs inward (drywall, flooring, fixtures, cabinets, appliances) is your responsibility. Your HO-6 needs higher dwelling/interior coverage.

Single entity / original specifications: the master policy covers the unit as originally built — including the original flooring, cabinets, and fixtures. Upgrades you’ve made are your responsibility. Your HO-6 covers improvements.

All inclusive: the master policy covers everything in your unit including improvements. Your HO-6 covers only personal property and liability.

Critical step: ask your HOA for the master policy declaration and confirm which type applies. Most owners don’t know, and it determines what HO-6 limits you need.

What HO-6 covers

Coverage A — Dwelling (interior): the parts of your unit your HO-6 is responsible for under the master policy structure. For “bare walls in” master policies, this includes drywall, flooring, cabinets, fixtures, built-ins, and unit-specific improvements.

Coverage C — Personal property: your belongings — furniture, electronics, clothing, kitchenware. Same as a standard homeowners policy.

Coverage E — Liability: if someone is injured in your unit or you damage another unit (e.g., your bathtub overflows into the unit below).

Coverage F — Medical payments: small no-fault medical coverage for guests injured at your unit.

Loss assessment: unique to condo/co-op. Pays your share of a building-wide loss that exceeds the master policy’s coverage or deductible.

Loss of use: temporary housing if your unit is uninhabitable after a covered loss.

Loss assessment — the underrated coverage

Loss assessment is HO-6’s signature coverage and the one most condo owners under-insure.

Scenario: a fire damages the lobby and several common areas. The master policy pays out most of the repair cost but applies a $50,000 deductible. The HOA assesses unit owners to cover the deductible — divided among 50 units, that’s $1,000 per owner.

If your HO-6 has $1,000 in loss assessment coverage, it pays. If it has $0, you pay out of pocket.

Standard HO-6 policies include $1,000-$5,000 of loss assessment. For older buildings or buildings with deferred maintenance, increasing this to $25,000-$50,000 is often a good idea — premium impact is typically $30-$100/year.

When loss assessment becomes critical:

• Older buildings with potential major-system failures (plumbing, electrical, roof, foundation)
• Buildings with significant common amenities (pools, garages, elevators)
• Coastal buildings with hurricane exposure
• After major catastrophes that produced shared deductible exposure

Sizing your HO-6 limits

Coverage A (interior dwelling):

• Bare-walls master policy: $30,000-$100,000+ depending on unit size and finish level
• Single-entity master policy: $10,000-$50,000 for upgrades and improvements
• All-inclusive master policy: minimal or none needed

Coverage C (personal property):

• Size to actual contents replacement cost — typically $25,000-$100,000+
• Always pick replacement cost coverage, not actual cash value
• Add scheduled riders for high-value items above policy sublimits

Coverage E (liability):

• $300,000 minimum; $500,000 if you have significant assets
• Add an umbrella policy if your assets warrant it

Loss assessment:

• $5,000 minimum; $25,000-$50,000 in older buildings or hurricane zones

Common HO-6 mistakes

1. Carrying minimum loss assessment in an older building — a single deferred-maintenance failure can produce a $20,000 special assessment.

2. Not knowing which master policy type applies — leads to under-insured improvements or paying for coverage you don’t need.

3. Skipping flood coverage — condo flood insurance exists and is necessary in coastal markets. Master policies often don’t cover ground-floor flood damage.

4. Forgetting about water damage from above — your HO-6 needs water damage coverage for upstairs-neighbor leaks, which are the most common condo claim type.

5. Buying minimum personal property — the default 50% of dwelling can be inadequate for furnished urban condos with significant electronics.

Coordinating with your building

Before finalizing your HO-6:

1. Get the master policy declaration from your HOA
2. Confirm the master policy type (bare walls, single entity, all inclusive)
3. Note the master policy deductible and whether it’s a shared assessment risk
4. Ask about flood insurance — does the master policy cover it?
5. Confirm whether any building-wide projects could trigger near-term assessments

The condo insurance market is mostly competitive — carriers like State Farm, Allstate, GEICO Home (via partners), USAA, Travelers, and Lemonade all write HO-6 policies. Get 3-5 quotes and compare the loss assessment and water damage coverages specifically.