Key takeaways
- Condo insurance (HO-6) covers your unit's interior, belongings, personal liability and extra living costs after a covered loss.
- Read your HOA's master policy first; whether it is bare walls, single entity or all-in determines how much dwelling coverage you need.
- Loss assessment coverage helps pay your share if the association bills owners for a large shared loss or its deductible.
- Your mortgage lender may require HO-6 coverage with minimum dwelling limits.
In this guide
Condo insurance, also called an HO-6 policy, covers the parts of your condominium that your association's master policy does not: typically your unit's interior finishes and improvements, your personal belongings, your personal liability, and extra living costs if the unit becomes unlivable. How much coverage you need depends largely on what the master policy already covers.
Getting the dwelling limit right is the part people most often get wrong, because it depends on a document most condo owners have never read. Below we explain how HO-6 and master policies fit together, what to buy and how to avoid gaps.
How condo insurance works with your HOA master policy
Every condo association carries a master policy that insures common property and the association's liability. Your HO-6 policy picks up where it stops. The dividing line depends on which type of master policy your association has.
| Master policy type | What the association insures | What your HO-6 needs to cover |
|---|---|---|
| Bare walls (studs out) | Structure and common areas only, not unit interiors | Everything inside your unit: drywall, flooring, cabinets, fixtures, plumbing and wiring within the unit |
| Single entity | Structure plus original interior fixtures as built | Upgrades and improvements made since, plus belongings |
| All-in (all inclusive) | Structure, original fixtures and often owner improvements | Mainly belongings, liability and any gaps in the master policy |
Ask your association or property manager for the master policy's declarations page and the section of your governing documents that describes insurance responsibilities. Some states also define by law what the association must insure.
What does an HO-6 policy cover?
A typical condo policy includes several parts, similar to a homeowners policy. For a comparison with standard homeowners coverage, see our guide to what homeowners insurance covers.
- Dwelling (Coverage A). Interior walls, floors, ceilings, built-in appliances, cabinets and fixtures you are responsible for, including improvements like upgraded countertops or flooring.
- Personal property (Coverage C). Furniture, clothing, electronics and other belongings, including items in a storage unit.
- Loss of use (Coverage D). Hotel or rent and extra costs while your unit is being repaired after a covered loss.
- Personal liability (Coverage E). Legal defense and damages if you injure someone or damage their property, including a neighbor's unit.
- Medical payments (Coverage F). Small medical bills for guests injured in your unit.
- Loss assessment. Your share of costs the association charges owners after a covered loss to common property.
Common exclusions include flood, earthquake, wear and tear, pests and gradual leaks. Flood and earthquake coverage can be purchased separately; our guides to flood insurance and earthquake insurance explain the options.
How much dwelling coverage does a condo owner need?
Estimate the cost to rebuild everything inside your unit that the master policy does not cover. For a bare walls policy, that may include drywall, insulation, flooring, cabinets, countertops, fixtures and interior plumbing and electrical. For an all-in policy, it may be only your later improvements.
A contractor's estimate or your insurer's rebuild calculator can help. Your lender may also set a minimum. For general principles on estimating rebuild cost, see our guide to how much dwelling coverage you need.
Why loss assessment coverage matters
Loss assessment coverage is easy to overlook and can be very important. If a fire, windstorm or liability lawsuit costs the association more than its master policy pays, or if the master policy has a large deductible, the association can assess every owner for a share.
Many HO-6 policies include only a small amount of loss assessment coverage by default. You can usually raise it for a modest cost. A common approach is to set your loss assessment limit at least equal to your share of the master policy deductible, and higher if your building faces large wind or hurricane deductibles.
How much does condo insurance cost?
Condo insurance often costs less than homeowners insurance because the association covers the building structure. Your price depends on:
- Location, including weather, crime and local building costs
- Dwelling, personal property and liability limits
- Deductible
- Loss assessment limit and add-ons such as water backup or scheduled valuables
- Building features, such as sprinklers, age of the plumbing and security
- Claims history and, in most states, credit-based insurance score
Bundling your condo and auto policies with the same insurer may also earn a multi-policy discount.
Condo owners who rent out their unit
If you rent your condo to tenants, a standard owner-occupied HO-6 may not fit. Insurers typically offer a unit-owners rental endorsement or a separate landlord-style condo policy that adjusts liability coverage and replaces loss of use with fair rental income coverage, which reimburses lost rent while the unit is being repaired. Short-term rentals may need specific coverage, and some policies exclude them. Tell your insurer how the unit is used.
Choosing and buying a condo policy
- Get the master policy details from your association and identify its type and deductible.
- List improvements you or previous owners made to the unit.
- Take a room-by-room inventory of your belongings and choose a personal property limit.
- Choose replacement cost coverage for belongings where available.
- Set liability at a level that protects your savings, and consider an umbrella policy.
- Match loss assessment coverage to your share of the master deductible.
- Add water backup, earthquake or flood coverage if relevant.
- Compare quotes from several insurers with identical settings.
If you are renting a condo from its owner rather than buying, you need a renters insurance policy instead, since the owner's HO-6 does not cover your belongings or liability.
The bottom line
A condo policy is only as good as its fit with your association's master policy. Read the master policy first, set your dwelling limit to cover everything inside the unit that the association does not, and carry enough loss assessment coverage to handle the master deductible. Then add liability, belongings and any flood or earthquake protection your location calls for.
Frequently asked questions
What is the difference between HOA insurance and condo insurance?
The HOA or master policy is bought by the association and covers shared property such as the roof, exterior walls, hallways and amenities, plus the association's liability. Condo insurance, or an HO-6 policy, is bought by each owner and covers their unit's interior, personal belongings, personal liability and additional living expenses. The two policies are designed to work together without overlapping.
How much is condo insurance?
Condo insurance often costs less than a comparable homeowners policy because the association's master policy covers much of the structure. Your price depends on your location, the dwelling and personal property limits you choose, your deductible, the building's features and your claims history. Compare quotes with identical limits, including loss assessment coverage, to judge price fairly.
Is condo insurance required?
No state law generally requires it, but if you have a mortgage your lender will usually require an HO-6 policy, often with a minimum dwelling limit. Many condo associations also require owners to carry HO-6 coverage in their bylaws or governing documents, sometimes with minimum liability limits. Check your loan documents and association rules.
What is loss assessment coverage on a condo policy?
Loss assessment coverage pays your share when the association charges owners for a covered loss to shared property, such as when damage exceeds the master policy limit or when the association passes its deductible on to owners. Base policies often include a small amount, and you can usually increase it inexpensively. Match it to your association's master deductible.
Does condo insurance cover water damage from the unit above?
Generally, sudden water damage from another unit, such as a burst pipe or overflowing tub upstairs, is a covered peril under an HO-6 policy for your interior and belongings. Depending on your association rules and state law, the master policy or the other owner's insurance may also be responsible for part of the loss. Gradual leaks and flooding from outside are typically excluded.
Official Resources & Further Reading
Use these resources to check current guidance. Requirements and availability may vary by state and provider.
This guide is for general educational purposes and is not individualized financial, legal, tax or insurance advice. Product terms, rates and availability vary by provider and location. How we make money.
