Quick answer: Condo insurance, often called an HO-6 policy, protects a unit owner’s interior structure (to the extent the association’s master policy does not), personal property, personal liability, additional living expenses and loss assessments. How much interior coverage you need depends on the type of master policy your community carries: all-in, all-in excluding owner improvements, or bare walls. The Washington State Office of the Insurance Commissioner notes that unit owners are typically responsible for the community’s master policy deductible in each of those arrangements. Read your governing documents and the association’s certificate of insurance before choosing limits.
Owning a condo means sharing a building, and that means sharing insurance responsibilities. Your association insures part of the property through its master policy, and you insure the rest through your own unit owner’s policy. Problems usually arise in the gap between the two, when an owner assumes the association covers something that it does not.
This guide explains how the two policies fit together and how to size your HO-6 coverage. For the broader picture of homeowners coverage forms and terms, see our complete homeowners insurance guide.
Sources: Washington State Office of the Insurance Commissioner, “Learn how condo insurance works”; Insurance Services Office (ISO) homeowners policy program, including the HO 00 06 Unit-Owners Form, as commonly used by insurers; National Association of Insurance Commissioners (NAIC) consumer homeowners insurance guidance. Policy wording and condo laws vary by state and insurer. Check your own governing documents and policy. This is general information, not insurance or legal advice.
Two Policies, One Building
The Washington State Office of the Insurance Commissioner (OIC) describes condo coverage as two policies working “in tandem”:
- The master policy, paid for through owner dues, covers certain losses to the community, such as the building exterior, roof and common areas, and possibly some or all of the unit interiors depending on its type.
- The unit owner’s policy (HO-6), bought by each owner, covers the owner’s unit to the extent the governing documents make it the owner’s responsibility, plus the owner’s belongings, liability and other costs.
Because the dividing line is set by your community’s governing documents, two condo owners in different buildings can need very different HO-6 coverage.
The Three Common Types of Master Policies
The OIC groups master policies into three categories.
| Master policy type | What the association covers | What the unit owner typically covers |
|---|---|---|
| All-in | Exterior and all interior finishes, such as doors, windows, cabinets, paint, trim, light fixtures and floor coverings | The master policy deductible, belongings, liability and other personal coverages |
| All-in, excluding improvements or betterments | The unit to its original interior and exterior finishes | Upgrades made by the owner or prior owners, the community deductible, belongings and liability |
| Bare walls (walls out) | Up to the uncovered drywall and subfloor, plus roof and common areas | All interior finishes, the community deductible, belongings and liability |
Why improvements matter
Under an “all-in, excluding improvements” master policy, the association rebuilds to the original finishes. The OIC gives examples of owner changes that would fall to the owner, such as replacing laminate countertops with granite, replacing carpet with tile or repairing a skylight a previous owner added. If you bought a renovated unit, you may own improvements you did not make.
Why bare walls policies need the most HO-6 coverage
Under bare walls coverage, you are responsible for everything inside the unfinished walls: cabinets, countertops, flooring, fixtures, bathroom fittings and paint. Your HO-6 dwelling limit should reflect the cost to rebuild all of that.
What an HO-6 Policy Covers
The OIC lists the main coverages to ask about:
- Structure or dwelling: coverage for your unit based on the community’s governing documents. In the ISO unit-owners form, this is Coverage A.
- Personal property: your belongings. The OIC cautions that valuables such as jewelry may be subject to specific dollar limits and that contents may be settled on an actual cash value basis unless you add replacement cost coverage.
- Personal liability: protection if someone makes a claim against you.
- Medical payments to others: medical expenses for people accidentally injured on property you own.
- Additional living expense: the cost of living elsewhere temporarily if your unit is unlivable after a covered claim.
- Loss assessment: help paying special assessments the association charges owners for community losses.
For a refresher on how lettered coverages work, read our explainer on homeowners insurance Coverages A through F.
Loss Assessment Coverage and the Master Policy Deductible
Loss assessment coverage is the part of an HO-6 policy that many owners overlook. The OIC gives an example: wind damages the roofs of several units, the damage exceeds the master policy’s limits, and the association charges owners a special assessment to cover the rest. Loss assessment coverage can help pay your share. The OIC adds that if the cause of damage is covered under your unit owner’s policy, the loss assessment for that cause will also be covered.
Two practical points:
- Know the master policy deductible. The OIC notes that unit owners are responsible for the community deductible under all three master policy types. Associations may pass that deductible to the owner whose unit was involved or assess it across all owners, depending on the governing documents and state law.
- Check your loss assessment limit. Standard limits in many unit-owner policies are modest. If your association carries a large deductible, such as a percentage wind or hurricane deductible, ask about raising this limit and whether deductible assessments have their own sublimit.
Our article on hurricane and wind/hail deductibles explains how percentage deductibles work.
What Condo Insurance Does Not Cover
According to the OIC, condo insurance does not cover:
- community property, which is the association’s responsibility;
- flood or earth movement; and
- wear and tear or maintenance items.
Flood coverage for a condo unit is a separate purchase. Our guide to flood insurance basics covers the National Flood Insurance Program and private flood options.
How to Choose Your HO-6 Limits
Step 1: Read the governing documents
Find the section on insurance in your declaration, bylaws or rules. It defines which parts of the unit the association insures and which you must insure.
Step 2: Get the certificate of insurance
The OIC notes that unit owners receive a certificate of insurance each year when the community policy renews, confirming the master policy’s limits and deductible. If you have not seen yours, ask the board president or property manager.
Step 3: Price your interior
For bare walls or improvements-excluded master policies, estimate the cost to rebuild interior finishes you are responsible for: flooring, cabinets, countertops, fixtures, appliances that are part of the unit, paint and trim.
Step 4: Inventory your belongings
List what you own and estimate replacement cost. Decide whether to buy replacement cost coverage for contents rather than actual cash value.
Step 5: Set liability limits
Choose liability limits that reflect your assets and risks. Some owners add umbrella coverage for extra protection; see our guide to umbrella insurance basics.
Step 6: Size loss assessment coverage
Compare your loss assessment limit with the master policy deductible and any large exposures, such as a building-wide wind deductible.
HO-6 vs. HO-3 and Renters Insurance
| Policy | Who it is for | Structure coverage |
|---|---|---|
| HO-3 | Owners of single-family homes | Entire dwelling, generally on an open perils basis |
| HO-6 | Condo and some townhome unit owners | Only the parts of the unit the owner is responsible for under the governing documents |
| HO-4 (renters) | Tenants | None; covers belongings, liability and additional living expenses |
If you rent out your condo, talk with your insurer, because a unit occupied by tenants may need a different policy or endorsement. Tenants in your unit would need their own renters policy for their belongings.
When Water Moves Between Units
Water damage is a common reason condo owners file claims, because a leak in one unit can travel to the units below. When that happens, several policies may be involved at once: the master policy for common elements and any interior finishes it covers, your HO-6 for the parts of your unit you are responsible for, and possibly the HO-6 policy of the owner whose plumbing failed if that owner is found legally responsible.
Sorting this out depends on the cause of the leak, the governing documents and state law. A few steps help:
- Stop the water and notify the association or property manager right away, because the source may be in a common element.
- Photograph the damage in your unit before cleanup begins.
- Report the claim to your own insurer promptly, even if you expect the master policy or a neighbor to pay part of the loss.
- Keep receipts for emergency repairs and any temporary housing costs.
Our step-by-step guide on how to file a homeowners insurance claim walks through documentation and the adjuster process in more detail.
Townhomes and Other Shared-Ownership Homes
The OIC notes that its guidance applies to owners in condo and townhome communities. Not every townhome is insured the same way, however. In some communities the association insures the full building, and in others each owner owns and insures the structure outright, which may call for a homeowners policy such as an HO-3 rather than an HO-6. Your deed and governing documents decide which situation applies, so read them before you shop, and tell the insurer exactly how the property is owned.
Documents to Keep Handy
Store these together, digitally and on paper, so you can find them after a loss:
- the community declaration, bylaws and any insurance rules;
- the current certificate of insurance for the master policy;
- your HO-6 declarations page and full policy form;
- receipts or photos for interior upgrades you or prior owners made; and
- a home inventory of your belongings.
Review them each year when the master policy renews, because the association can change its insurer, deductible or coverage type.
Questions to Ask Before You Buy
- What type of master policy does my association carry, and where do its responsibilities end?
- What is the master policy deductible, and how does the association assess it?
- Does my HO-6 policy cover my interior on an open perils or named perils basis?
- Are contents covered at replacement cost or actual cash value?
- What are the special limits for jewelry, collectibles and other valuables?
- What is my loss assessment limit, and can it be raised?
- Is water backup from drains or sewers covered, or is an endorsement needed?
Common Mistakes Condo Owners Make
- Assuming the HOA covers the interior. Many master policies stop at bare walls or original finishes.
- Forgetting prior owners’ upgrades. Improvements may be your responsibility even if you did not make them.
- Ignoring the master deductible. It can land on your doorstep after a loss.
- Keeping the default loss assessment limit. It may be far smaller than a large community deductible.
- Skipping flood coverage. Condo policies generally exclude flood.
Frequently Asked Questions
What does an HO-6 condo insurance policy cover?
It typically covers the parts of your unit you are responsible for under the governing documents, your personal property, personal liability, medical payments to others, additional living expenses and loss assessments.
What is the difference between bare walls and all-in condo coverage?
Under an all-in master policy, the association covers the exterior and interior finishes. Under bare walls, the association covers only up to the unfinished drywall and subfloor, so the owner insures all interior finishes.
Who pays the HOA master policy deductible?
The Washington OIC notes that unit owners are responsible for the community deductible under all three common master policy types. Your governing documents determine how it is assessed.
Does condo insurance cover flooding?
No. Condo policies generally exclude flood and earth movement. Flood coverage is purchased separately.
Do I need condo insurance if my HOA has an all-in master policy?
Yes, for your belongings, personal liability, additional living expenses, loss assessments and the master deductible.
The Bottom Line
Your HO-6 policy fills the space your association’s master policy leaves open. Start with the governing documents and certificate of insurance, identify whether the master policy is all-in, improvements-excluded or bare walls, then set interior, contents, liability and loss assessment limits to match. The owners who are surprised after a loss are usually the ones who never checked where the master policy stops.
