Condo Insurance Simplified

Condominium Insurance is a little different than your standard homeowner’s insurance.  With a condominium, the association dues that are paid by all of the condo owners will generally cover the unit that you purchase.  However, it does not always cover the items located inside of your unit, which is pretty important stuff to most homeowners. So while your walls may be covered in an event of a disaster, your beautiful kitchen is not.

Interior insurance requires a different type of policy and the lenders have guidelines for this type of insurance. This is known as H-06 Insurance.

How Do You Know the Insurance You Will Need?

  • Your lender will look at the insurance coverage for your condominium.
  • The Master policy must cover the entire project – common elements, fixtures, buildings, equipment belonging to HOA/Condominium Association.
  • An HO-6 policy is only required by the borrower if the Master Policy does not cover the interior of the condo unit.

Here are some quick tips:

Depending on your loan type and master policy you may need to purchase H-06 insurance:

  • Sufficient to repair the condo unit to its condition prior to a loss claim event.
  • To provide for loss or damage at the replacement cost.
  • Where the deductible is no more than 5%.

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