What is apartment insurance (HO-6)? What does the cover?

Also known as the HO-6 policy, apartment insurance protects units within a condominium association and can even offer more comprehensive coverage that can protect your possessions and your visits!

HO-6 policies are also called full coverage because they protect your individual unit by supplementing the coverage of the master policy, maintained by your condominium association, which covers the common areas of your condominium.

Items that are covered by the condo association will be outlined in their master policy. A complete master policy review will give you the information you need to get the proper amount of condo insurance for your unit and help your BRZ agent know exactly what you need.

However, standard condo insurance does not apply in certain situations, such as floods and natural disasters. If you live somewhere exposed to nature’s actions,  consider additional policies

What is covered by the master insurance policy – ​​HOA?

Normally, common areas of a residential building are covered by the master policy. It is hired by the condominium itself or HOA (Homeowner Association). It includes common areas, but also roofs and elevators. 

The costs of this insurance are usually divided between all apartment owners in that condominium, often in the form of a monthly fee. 

There are three main types of condo master insurance policies:

Bare wall coverage is a limited master insurance policy that covers the structure as well as most fixtures and furniture in the common areas. It also covers any item that is collectively owned by the condominium association.

Single entity coverage offers everything already included in bare wall coverage and also provides coverage for recessed properties such as light fixtures in individual condominium units.

Full coverage applies to all properties collectively owned by the condominium association or forming part of the condominium structure. It is the most comprehensive master condo insurance policy, covering all condo improvements and renovations.

The type of primary insurance policy your HOA or condo association has will directly affect the value of your HO-6. You should ask the association for a copy of the policy detailing what it covers and how it covers it.

What can Apartment Insurance (HO-6) cover?

Apartment insurance policies usually offer coverage in the following categories:

  1. Building propertyThe unit itself, including walls and fixtures such as finishes. 
  2. Personal PropertyFurniture, electronics, and other movable property
  3. Personal liabilitylegal expenses of claims or lawsuits against you
  4. Loss of useLodging /transportation costs if the unit is uninhabitable
  5. Loss assessmentYour share of any losses shared by the association

The difference between this insurance and other standard home insurance is that it only covers the inside of your property, that part of the building that you call home, which makes your installments lower. Furthermore, it offers the same additional coverage as any other insurance available on the market. 

The initial coverages of apartment insurance cover a list of hazards pre-defined in the policy, such as fire, hail, theft, and vandalism. Any hazard not identified on the paper will be your responsibility. 

However, you can turn your insurance into an “open risk” policy by adding a Unit Owners Special Coverage AThis is a policy that covers damages from any cause, except for some that will be mentioned in the policy. 

Hazards often named for exclusion from coverage include floods, earthquakes, and sinkholes.

Building Property – Construction Goods

The HO-6 protects your unit’s interior, which includes flooring, interior walls, built-in cabinets, sinks, cladding, any permanent elements. If your apartment is damaged or completely destroyed for a cause included in the coverage, your insurance will pay up to the limit defined in your policy. This is usually equal to the total cost of the unit.

The division of what is the property and what should be in insurance coverage between homeowners and condominium associations can present conflicting issues when the damage affects more than one area of ​​a building.

Depending on which areas are affected, an incident may be covered by multiple policies at the same time. A leaky roof – covered by the master policy – ​​can also cause damage to your apartment or even the apartment next door. This would involve not only HOA coverage but each unit’s HO-6 insurance policies. 

When choosing your home’s coverage limit, consider the added value of any renovation or even a new light fixture. Always review the insured values! 

Personal Property – Personal Assets

Your belongings will be covered by personal property coverage under an HO-6 policy. 

As with residential insurance, your insurance will replace any property belonging to the owner of the condominium or family members in the event of an accident, up to the policy value limit.

Covered goods may include furniture, clothing, electronics, and any other items that are not part of the unit’s structure.

Typically, the threshold for property claims is around 50% of the housing cover.

Like the structure itself, a condo owner’s belongings are covered in a long list of dangers. The most important are fire, electrical discharges, and theft.

In the event of a storm, for example, if a window is broken and furniture is damaged by the rain that wet it, your insurance would cover the cost of the window (frame) and furniture (personal property). 

This coverage covers more than your apartment. If an insured item is stolen on a trip, you can claim insurance. 

Personal Liability – Civil Liability 

Liability insurance protects you and your family members from lawsuits for personal injury or property damage that can happen inside your home. 

It covers everything from attorney fees to medical bills in court decisions arising from an accident or negligence. Without liability coverage, you may have out-of-pocket legal expenses that can be financially devastating.

Liability coverage is an essential part of all apartment insurance policies, as well as for individual homeowners and even renters. 

Most HO-6 policies include at least $100,000 in liability coverage. 

If you need more liability coverage, you can also purchase an umbrella policy (Umbrella) to supplement your condo insurance liability limit.

Loss of use – Loss of use

This coverage is not the most common, but it can save your skin from an unforeseen.

If your apartment becomes uninhabitable due to extreme damage or evacuation order, the loss-of-use coverage will reimburse you for the extra expenses to maintain your standard of living until you can return there.

This can include rent, food, and sometimes even the extra expense caused by traveling longer than usual for day-to-day activities. 

Loss of use terms can vary: some refund you up to a certain amount per day or with a set number of days, while others assign a maximum amount per claim.

Loss Assessment – Loss Assessment

Also called special assessment coverage, this is an optional coverage to add to your policy. Covers shared liability damages and losses in condominiums, such as extra fees for a repair or any condominium association cost in excess of the amount reserved for such. 

Other additional coverages:

Flood and earthquake insurance for condominiums

As we have already mentioned, insurance, in general, does not cover damage related to earthquakes, floods, or landslides. You will need to purchase separate coverage if you live in an at-risk region. You may also be required to purchase these additional coverages as a requirement for a mortgage.

vacant apartment insurance

If your apartment is vacant for an extended period of time, for at least 30 consecutive days, some policies may not cover claims for damage incurred during this period.

Some insurers consider unoccupied and vacant properties a major risk as damage to the structure can take time to detect, and the property is more susceptible to break-ins. 

So, if you want to ensure the safety of your property, you can purchase this coverage if you plan to spend more than one month away. Is it an extra charge? But have you ever thought about spending more than one month away from your home, and on the way back, you discover a loss that you will have to pay financially? 

By now, you must be more than convinced to protect your apartment like the precious asset it is, right? 

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