Condo Insurance: What HOA Misses

A condo owner's insurance works differently from a traditional homeowners policy, because two policies cover the same building at different layers. The HOA's master policy covers the shared structure and common areas. Your HO-6 policy covers what the master policy leaves out - and the gap between them is where most condo owners are underinsured.

What the master policy usually covers

Most association master policies insure the building's exterior, roof, shared walls and common areas. Whether they also cover interior fixtures, cabinetry, flooring and wall finishes depends on the association's governing documents - some are "bare walls," others include more.

What your HO-6 should cover

• Walls-in coverage. Interior build-out: floors, cabinets, countertops, fixtures and any improvements you made.
• Personal property. Your furniture, electronics and belongings.
• Loss assessment. If the association bills owners for a covered loss - a large deductible or uninsured common-area damage - this pays your share.
• Liability. If someone is injured in your unit or you damage a neighbour's property.
• Loss of use. Temporary housing if your unit becomes uninhabitable.

Your exposure = interior build-out + belongings + loss-assessment risk

Why loss assessment surprises people

When a shared loss exceeds the master policy's deductible or falls outside its coverage, the association can pass the cost to unit owners as a special assessment. Loss assessment coverage in your HO-6 is what protects you from that bill, and it is routinely capped too low by default.

Get the governing documents

The single most important step is reading the association's master policy and bylaws to see exactly where their coverage ends and yours must begin. Guessing leads to double coverage in one place and none in another.

Frequently asked questions

Is condo insurance required? Often yes - many associations require an HO-6 policy, and mortgage lenders may too.

Does it cover the building exterior? No. That is the master policy's job.

Estimate your HO-6 costs with the calculator below.