HO6 Condo Insurance

I wanted to do a video on HO6 condo insurance, which is condominium insurance. A lot of people think on a condominium that you don’t pay anything. They think that the condo fee has something built into it for the insurance that covers the unit. That’s true to a degree.

Master Certificate of Insurance

The condominium fee covers your portion of the master certificate of insurance, the COI. The COI that the homeowners association has will cover the dwelling, the roof, the systems.

HO6 Condo Insurance

You really need something that’s also called HO6. It’s also called the walls-in policy. I had owned a condominium and I wasn’t aware and had to do some homework. And I realized that the policy that my building paid for through the master COI didn’t cover certain things that my HO6 policy did cover. Things like flooring, like the improvements inside, like appliances and fixtures, lighting fixtures and plumbing fixtures, tile. So apparently, I learned that my master COI only covered structural things. And systems things and roof if there’s a complete loss and had to rebuild the whole building, which is rare. Hopefully, that never happens to anybody. But the master COI doesn’t cover everything. So you need an HO6 or a walls-in policy.

Find out of drywall is covered

I’ve also realized that certain HO6 policies will need to include drywall. You have to find out if your master COI, what they consider structural, does it include drywall or not? Some do, some don’t. Mine did. So I didn’t need to have that coverage in my HO6 policy. I just made sure it covered everything else: Appliance, fixture, flooring, tiling, that sort of thing, lighting. This is a blog you can find on my website. You can either click on my blog and type in “HO6 insurance policy” and you’ll find it. Or you can see up here in the upper left, here’s the URL. But it goes and tells you a little bit about HO6 insurance. It’s a short read and it says what I just told you.

What amount of coverage is needed?

An important number is the HO6 insurance policy must provide coverage in an amount that is no less than 20% of the condominium unit’s appraised value. That’s really more of a guide. It’s not a mandate. Different insurance companies will come up with a different coverage number that may not necessarily be 20% of the appraised value of the unit. So that’s something to talk to your insurance agent about. Your lender might need to talk to the underwriter. There might be a requirement that’s different from lender to lender. Fannie Mae or Freddie Mac may have different requirements.

Conclusion

So just know that there is HO6 insurance or walls-in insurance on a condominium. And that there’s a lot of different details to look into. But you absolutely should get that in addition to getting your personal contents, your personal belongings covered. I hope that helps. Please feel to reach out with any other condo questions or any other mortgage questions, at all. Thank you for watching the video.

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