Here's what confuses most new condo owners: you pay HOA fees that include insurance, so why do you need your own policy? The answer comes down to a simple but crucial distinction—your condo association's master policy covers the building and common areas, but it doesn't cover what's inside your unit. That's where HO-6 condo insurance comes in, protecting everything your HOA policy won't.
Think of it this way: if a fire damages your building, the master policy rebuilds the structure. But who replaces your furniture, covers your hotel stay during repairs, or pays if someone slips in your kitchen and sues you? That's all on you—unless you have condo insurance.
What Condo Insurance Actually Covers
An HO-6 policy includes several distinct types of coverage that work together to protect you financially. Personal property coverage is the most obvious—it replaces your belongings if they're damaged, destroyed, or stolen. This includes furniture, electronics, clothing, and everything else you own inside your unit.
Dwelling or unit coverage protects the interior structure of your condo—things like drywall, flooring, cabinets, countertops, and built-in appliances. How much dwelling coverage you need depends entirely on your HOA's master policy type, which we'll explain in detail below.
Liability coverage is arguably the most important part of your policy. If someone gets injured in your unit or you accidentally damage someone else's property, liability coverage pays for medical bills, legal fees, and settlements. Standard policies typically include $100,000 to $300,000 in liability coverage, but you can increase this amount if needed.
Loss of use coverage, also called additional living expenses, pays for hotel stays, meals, and other costs if your condo becomes uninhabitable due to a covered event like a fire or pipe burst. This coverage continues until your unit is repaired or until you reach your policy limit.
The Critical Difference Between Master Policies
This is where condo insurance gets tricky. Your HOA's master policy falls into one of three categories, and understanding which type your building has is absolutely essential. The master policy determines where the association's coverage stops and your personal coverage needs to begin.
A bare walls policy covers only the building structure up to the drywall. Everything inside your unit—including the paint on the walls, flooring, cabinets, appliances, and all fixtures—is your responsibility to insure. This is the most limited type of master policy and requires the most comprehensive individual condo insurance.
A walls-in or single entity policy covers the building structure and original fixtures as they were when the building was first constructed. If you've upgraded your kitchen countertops, installed new flooring, or added custom lighting, those improvements are on you to insure. The association covers the basic unit; you cover the upgrades.
An all-in policy provides the broadest coverage from the HOA. It includes the structure, original fixtures, and built-in features like cabinetry and appliances as originally installed. With this type of master policy, your HO-6 policy mainly needs to cover your personal belongings and liability—not the unit's interior structure.
Here's the problem: many condo owners have no idea which type of master policy their building has. Request a copy of your association's master policy and review it carefully. If the language is confusing, ask your insurance agent to review it with you. Getting this wrong means you could be seriously underinsured or paying for duplicate coverage.
Why Loss Assessment Coverage Matters
Loss assessment coverage is one of the most overlooked—and most important—parts of a condo insurance policy. When damage occurs to common areas like the roof, parking garage, or pool, and the master policy doesn't fully cover the repairs, your HOA can levy a special assessment on all unit owners to make up the difference.
These assessments can run into thousands or even tens of thousands of dollars per unit. Maybe the building's deductible is $50,000 and gets split among 50 units—that's $1,000 each. Or hurricane damage to the exterior requires $500,000 in repairs that aren't fully covered—suddenly you're facing a $10,000 bill.
Standard HO-6 policies typically include only $1,000 in loss assessment coverage. That's not enough for most scenarios. The good news? Adding additional coverage is inexpensive. You can typically add $10,000 to $50,000 in loss assessment coverage for just a few dollars per month. Some insurers offer up to $100,000 in coverage. Given the potential cost of special assessments, this endorsement is almost always worth the small additional premium.
How Much Does Condo Insurance Cost?
The average cost of condo insurance nationwide ranges from $455 to $531 per year—roughly $38 to $44 per month. That's significantly less expensive than homeowners insurance because you're not insuring the entire building structure, just your unit's interior and contents.
But averages don't tell the whole story. Location matters enormously. Condo owners in Florida pay an average of $1,049 annually due to hurricane risk—more than double the national average. Louisiana, Texas, Oklahoma, and Mississippi also have higher-than-average rates. Meanwhile, states like Wisconsin, Utah, North Dakota, Iowa, and South Dakota offer some of the lowest rates in the country.
Your coverage limits also impact cost. A policy with $75,000 to $100,000 in dwelling coverage costs about $176 more annually than one with minimal dwelling coverage. Other factors include your deductible amount, the age and condition of your building, your claims history, and your credit score in states where that's allowed.
What's Not Covered
Standard condo insurance policies don't cover everything. Flood damage requires a separate flood insurance policy, which you can purchase through the National Flood Insurance Program or private insurers. If your condo is in a flood-prone area—especially near the coast or a river—flood insurance isn't optional.
Earthquake damage also requires separate coverage in high-risk areas. Other common exclusions include damage from neglect or lack of maintenance, wear and tear, pest infestations, and certain types of water damage like slow leaks or groundwater seepage.
How to Get the Right Coverage
Start by obtaining a copy of your HOA's master policy. This document tells you exactly what the association covers and what gaps your personal policy needs to fill. Read the declarations page carefully, looking for the type of master policy and coverage limits.
Next, inventory your personal belongings. Walk through your condo with your phone and photograph everything you own. Make a list with approximate values. This helps you determine how much personal property coverage you need and makes filing claims much easier if disaster strikes.
Shop around and compare quotes from multiple insurers. Rates vary significantly between companies, and bundling your condo policy with auto insurance often unlocks substantial discounts. Ask each insurer about loss assessment coverage limits and whether they offer replacement cost coverage for personal property rather than actual cash value.
Condo insurance isn't glamorous, but it's essential protection that costs less than most people expect. The key is understanding exactly where your HOA's responsibility ends and yours begins. Get a copy of that master policy, talk to an insurance agent who understands condo coverage, and make sure you have adequate loss assessment protection. With the right coverage in place, you can enjoy condo living without worrying about financial surprises.
