HOMEOWNERS GUIDE

HO-6 vs HO-3: condo insurance vs homeowners insurance

The short answer: an HO-3 insures a whole house, structure and contents, because nobody else insures any of it. An HO-6 insures one condo unit from the walls in, because a second policy, the association’s master policy, already insures the building. The decision between them is rarely yours to make: it follows from what you own. What is yours to get right is the HO-6 limit, and that depends on where your building’s master policy stops.

Disclaimer: Education only, not a quote and not insurance advice. Master policies differ by association; your governing documents and the master policy’s declarations are the record for your building.

The decision in one table

Read the table as a division of labor rather than a contest. Neither policy is the stronger one in the abstract; each is built for the ownership structure underneath it. The errors happen at the seam, when a condo owner carries an HO-6 limit sized as if the master policy covered the interior, in a building where it does not.

Two policies, one building: how the master policy works

The Insurance Information Institute’s condo guidance starts from the fact that two policies are necessary to fully insure a condo or co-op: a master policy for the building, held by the association and paid out of your maintenance fees or dues, and an individual policy for you. The master policy covers the common areas you share, the roof, basement, elevator, boiler and walkways, for both physical damage and liability. That part is consistent from building to building. What varies is how far into your unit the master policy reaches, and the Institute describes the two patterns a buyer will actually meet. In some associations, the master policy insures the individual units as they were originally built, including standard fixtures; the owner is then responsible only for alterations to the original structure, such as a kitchen or bathroom remodel. In others, the association insures only the bare walls, floor and ceiling, and in the event of a disaster the owner is responsible for elements like kitchen cabinets, built-in appliances, plumbing, wiring and bathroom fixtures. The Institute’s advice on finding out which pattern your building follows is unglamorous and correct: the information sits in your association’s bylaws or proprietary lease, obtainable from the board or the company that manages the building.

What the HO-6 itself insures

The NAIC’s A Consumer’s Guide to Home Insurance defines the condominium unit owners form in one sentence: it insures your personal property and your walls, floors and ceiling against all of the perils in the Broad Form list. Around that core, a condo policy carries the same supporting coverages as a house policy: liability and medical payments for injuries connected to your unit, loss of use while a covered loss makes the unit unlivable, and a loss assessment limit discussed below. Two consequences follow from the definition. First, personal property is usually the largest number on a condo policy, the reverse of a house policy, where the dwelling dominates; set it from an inventory of what you own, not as an afterthought percentage. Second, the perils list matters: the unit owners form follows the Broad Form’s named perils rather than the Special Form’s open-perils structure that most HO-3 policies use for the dwelling, one more reason the two forms are not interchangeable labels for the same protection. Our HO-3 vs HO-5 guide explains the perils structure inside the homeowners forms, and our scheduled personal property guide covers the small special limits that apply to jewelry and collectibles under either form.

Sizing the HO-6 dwelling limit: inventory the seam

The work is an inventory, not a guess. List what it would cost to restore your unit’s interior to its current state: flooring, cabinets and counters, bathroom fixtures, built-in appliances, interior doors, lighting and plumbing fixtures. Then mark each line as the master policy’s or yours, using the pattern you confirmed from the bylaws. The lines marked yours are your Coverage A need. Work it once on labeled hypothetical figures. Under a bare-walls master policy, an owner might list flooring at $18,000, cabinets and counters at $22,000, bathroom fixtures at $9,000 and built-in appliances at $6,000: $55,000 of interior that no other policy will rebuild. Under an all-in master policy in the same unit, the master policy carries the original finishes and the owner’s list shrinks to the upgrades, perhaps the $14,000 kitchen remodel a previous owner installed. Same unit, same belongings, a $41,000 difference in the right dwelling limit, decided entirely by a document most owners have never opened. A lender’s minimum, where one exists, protects the loan; it is not a substitute for this inventory.

Loss assessment: the condo-only line

One limit on an HO-6 has no equivalent on a house policy. When a covered loss to the building, or a liability claim against the association, runs past the master policy’s limits, the association can assess the shortfall across unit owners. Loss assessment coverage pays your share, up to its limit, when the assessment follows from a loss your policy covers. The limits are usually modest and the assessments are usually rare, which is exactly the combination that leaves the line unread until it matters. Check the limit on your declarations page with our declarations page guide beside you, and if your building is older, thinly reserved, or carries a large master-policy deductible, ask what raising the assessment limit costs; it is one of the cheaper lines on the policy.

If you rent the unit out, your tenant's belongings and liability sit on the tenant's own HO-4, not on your HO-6. The renters insurance guide explains that policy line by line.

The townhouse and co-op edges

Two housing types sit on the boundary. A townhouse can be organized either way: the NAIC guide states that if you own a townhouse you may insure it through either an individual homeowners policy or an association master policy. The test is structural ownership, not architecture: if the roof and exterior walls are yours, you need the policy that insures them, which is HO-3 territory and the worksheet in our how much homeowners insurance do I need guide; if the association owns and insures the shell, you are in HO-6 territory no matter what the building looks like from the street. Co-ops follow the condo pattern with different paperwork: the III guidance treats co-ops and condos together, with the individual policy covering liability, belongings and whatever structural elements the master policy leaves to the shareholder. In both cases the governing documents decide, and a declarations page that contradicts them is a problem to raise before a claim, not after one.

For the other side of the seam, what the association's master policy has to contain and how lenders cap its deductible, read the HOA master policy guide.

For scale, NAIC's 2023 data puts the countrywide HO-6 condo unit-owner average at $658 a year against $173 for a renters (HO-4) policy; the renters cost page sets out the HO-4 side by state and coverage amount.

For what condo policies cost, state by state and by coverage band, see our page on how much condo insurance costs, which reads NAIC's HO-6 data alongside the line between the master policy and the unit policy.

Common questions

To size the loss assessment line against your association's actual deductible, use the worksheet in our condo loss assessment guide.