An HO-6 policy is insurance covering the interior of a condominium. In most cases, the association’s master policy does not cover the interior and only applies to common areas. By “interior” we mean: carpet, cabinets, drywall, fixtures, and doors, upgrades, personal liability, and personal property.
For this reason alone, an HO-6 can be well worth the low cost of $15-$30 per month. But for many home buyers, an HO-6 policy is a precondition for underwriting approval. Under the new lending rules, an HO-6 insurance policy must provide coverage for no less than 20% of the condominium unit’s appraised value.
A secondary benefit is that your HO-6 could provide gap coverage for the sometimes high deductibles on the association’s master policy. HO-6 policies can also provide coverage for assessments applied an individual unit due to a direct loss to the condominium. These are features you’ll certainly want to discuss with your agent.
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