If you’re buying a townhouse or condo, you might think that because your unit is one of a larger building, your home insurance needs will be different. This is not necessarily true.
The Difference between HO-3 and HO-6 Insurance Policies
As you may be aware, there are several classifications of home insurance policies. If you own a townhouse or condominium, you will likely be buying an HO-3 policy or an HO-6 policy. Both of these policies cover your personal property, the interior finishes of your unit (walls, flooring, ceilings, etc.), and your liability. The main difference between and HO-6 condo policy and an HO-3 policy is that under an HO-6, the building structure and exterior are not covered. Therefore, if your townhouse or condo were to burn down or be destroyed in any other way, you would only receive an insurance claim payout to reimburse you for your personal belongings and the interior finishes—not the structure itself—a considerable difference in reimbursem*nt.
How a Master Building Policy Can Save You Money
Some clients who own or are buying a townhouse ask about the possibility of buying the often cheaper HO-6 condo policy rather than an HO-3 homeowners policy. An HO-6 policy is only appropriate if you have a condo association that has a master building policy that will cover the entire structure of your building, not just part of it.
HO-3 Insurance Policies Protect Your Condo or Townhouse
If your association doesn’t have a master building policy that will pay if your unit is destroyed, your mortgage holder will likely require that you buy an HO-3 rather than an HO-6. Even if you don’t have a mortgage, it’s also in your best interest to do so, because if you have a total loss, your claims payout will come nowhere near being enough to reimburse you for your losses.
An independent agency that works for you
We understand that homeowners insurance in Florida can be expensive, and we all want to save money where we can. However, you don’t want to skimp on insuring your home. The purpose of homeowners insurance is to provide you with peace of mind, whether your home is a townhouse, condominium, or traditional home.
At L & M Insurance Group, we represent multiple homeowners insurance companies, and we’re committed to finding you the most cost-effective policy to suit your needs. Please call us at 813-672-4100, or request a homeowners insurance quote online. We are an independent agency and we work for you!
FAQs
People who own condos and townhouses in a condominium complex purchase HO-6 insurance.
What is the difference between HO3 and ho6 for townhouses? ›
An HO-6 policy covers the interior walls, carpets, countertops, plumbing, cabinets and personal property/contents of your home as well as offers liability protection. An HO-3 policy covers all of the above, plus the roof, frame, foundation, exterior walls, floor, fixtures, property and outbuildings.
Can you write an HO3 for a condo? ›
If you own a townhouse or condominium, you will likely be buying an HO-3 policy or an HO-6 policy. Both of these policies cover your personal property, the interior finishes of your unit (walls, flooring, ceilings, etc.), and your liability.
What type of homeowners insurance policy is typically required on a condominium? ›
If you have a mortgage on your condo, your lender will typically mandate an HO-6 policy. Additionally, your homeowners or condo association may require certain coverages and limits.
What is an H06 condo policy? ›
HO-6 insurance is basically homeowners insurance for condo or co-op owners. A typical HO-6 policy covers your belongings, liability, and is designed to cover losses to the structure of your unit that your condo association's master policy won't.
What is the difference between HO3 and HO6 homeowners insurance? ›
HO-3 vs HO-6
The HO-6 policy caters to the condo owner, while HO-3 policies are designed to cover all areas of a property.
What is the difference between HO3 and HO6 coverage? ›
What's the difference between HO3 and HO6? The main difference between an HO3 policy for a single-family home and an HO6 condo insurance policy is that while an HO3 covers the physical structure of your home itself, an HO6 policy only covers what's inside the walls of your condo.
Is condo insurance the same as homeowners insurance? ›
Condo owners are only responsible for protecting the interior of their homes, with everything outside of those walls being covered by their homeowners association's master policy. So yes, homeowners and condo owners do need different insurance policies.
Which property is excluded under an HO3 policy? ›
Some common HO3 policy exclusions are:
Water damage from flood, sewer backup, or water seeping in through the foundation. Demolition of your home required by law to bring it to code.
What are exclusions on HO3? ›
Typically, the following are excluded on an open peril policy:
- Freezing pipes and systems in vacant dwellings.
- Damage to foundations or pavements from ice and water weight.
- Theft from a dwelling under construction.
- Vandalism to vacant dwellings.
- Latent defects, corrosion, industrial smoke, pollution.
- Settling, wear and tear.
A useful guideline for determining the amount of dwelling coverage is to aim for 20% of the appraised value of your condo. This rule of thumb helps ensure that you have sufficient coverage to protect the interior elements of your condo unit, which might not be covered under the condo association's master policy.
Which homeowners policy is specially designed for condominium unit owners? ›
Homeowners' insurance for condos, also known as an HO-6 policy, is tailored to the unique needs of condominium owners. Unlike traditional homeowners' insurance (HO-3 policy), which covers both the interior and exterior of a standalone home, condo insurance typically focuses on the interior structure of the unit.
What is the difference between HO6 and condo insurance? ›
What Does an HO6 Policy Cover? If you own a condo or co-op unit, the common areas like the hallways, land and other shared areas typically are covered by a collective homeowners association insurance policy. But your unit is not always covered by this policy. That's why you need condo (also known as HO6) insurance.
Does the HO6 policy cover the roof? ›
An HO-6 policy typically includes many of the same coverage types, but covers just the interior structure of the condo. The exterior elements of the building, like the roof, are usually covered by the HOA master policy.
Does HO6 cover drywall? ›
It will not cover any plumbing, electrical, drywall, flooring, cabinets, personal property, etc…. So if the building needs to be rebuilt, you basically will be left with a shell. Also, if someone slips and falls in your unit, you can be held liable for any damages.
What is the difference between HO6 and master policy? ›
HO-6 policies are also called walls-in coverage because they protect your individual unit, while your condo association or co-op association's master policy covers the building's common areas. However, standard condo insurance doesn't apply in certain situations, such as floods.
What does the HO-3 homeowners policy provide? ›
HO-3 insurance is the most common type of home insurance policy. Standard HO-3 policies provide coverage for your home's structure, contents, liability, medical payments and additional living expenses.
Is an HO3 policy good? ›
Homeowners need HO-3 insurance because it provides financial coverage should your home's structure get damaged from natural disasters and other perils such as theft or fire. Throughout your life as a homeowner, many unexpected injuries can occur as well, which is why liability protection is included in your policy.
What is the key difference between a homeowners and a condo policy? ›
Liability coverage
For example, if a visitor slips on the building's front stairs and breaks an ankle, your association's insurance will typically kick in. The biggest difference between condo and homeowners liability coverage is that a homeowner needs coverage for their entire property.
