Condo Insurance — What Your HOA Policy Doesn’t Cover
Your HOA master policy covers the building. It does not automatically cover the inside of your unit, your upgrades, your belongings, or a special assessment after a big loss. That is what an HO-6 condo policy is for. The number that matters most is Coverage A: the limit you chose for the interior you are responsible to rebuild. If that limit is stale, the gap is yours. Below we cover bare walls vs all-in master policies, water claims, and loss assessment coverage.
Your HOA Has a Master Policy — But It Has Limits
Most condo associations carry a master insurance policy. It covers the building structure — the roof, exterior walls, common areas, hallways, elevators, and pool. But it’s the association’s policy, not yours. And not all master policies cover the same thing.
Master policies are commonly written on a bare walls, single entity, or all-in basis. A bare walls policy covers up to the unfinished interior walls. Everything inside your unit — drywall, flooring, cabinets, countertops, fixtures — is your responsibility. A single entity policy covers the building as originally built, including original interior finishes, but not your upgrades. An all-in policy generally covers more of the original finishes, but upgrades are still on you.
Your CC&Rs and association governing documents define where the master policy stops and your responsibility starts. The insurance follows those documents. Most condo owners never read them — and that’s where the gap forms.
The HO-6 Policy — Your Coverage
Your condo insurance is called an HO-6 policy. It covers your personal property, liability, interior improvements, and the parts of the unit the master policy doesn’t reach.
The critical thing most condo owners miss is this: your HO-6 has a Coverage A limit for the interior parts of the unit you’re responsible for insuring. You pick that number when the policy is set up. If that limit is too low, the carrier won’t rebuild beyond it. The gap is yours.
If you set Coverage A at $50,000 five years ago and your interior would cost $120,000 to rebuild today — with upgrades, rising material costs, and labor — you’re $70,000 short. Construction costs have climbed significantly in recent years, which makes this gap even more common.
What Your HO-6 Covers
Dwelling coverage (Coverage A): Covers the interior — walls, floors, cabinets, countertops, fixtures, built-in appliances, and any improvements you’ve made.
Personal property: Covers furniture, clothing, electronics, and belongings. This amount is often set too low — there’s no automatic formula like the 50% of dwelling coverage on a standard homeowners policy. Review the number. Also, most HO-6 policies default to actual cash value on personal property, which means depreciation reduces your payout. A replacement cost endorsement pays the full current cost to replace an item. A good agent includes this at quoting — it’s not standard on every policy.
Liability: Covers injuries inside your unit — medical and legal costs. Works the same as a homeowners policy.
Loss of use: Covers temporary living expenses if your unit is uninhabitable during repairs.
Water Damage — The Most Common Condo Claim
Coverage depends on the cause. A sudden pipe burst is typically covered. A slow leak that’s been going on for months may not be. Sewer backup usually requires a separate endorsement. And if the damage results from neglect or deferred maintenance, your carrier may deny the claim. Knowing the difference between sudden damage and gradual damage matters.
Loss Assessment Coverage
This is the coverage most condo owners have never heard of. Your HOA’s master policy has a deductible — sometimes $25,000, $50,000, or more. After a major loss, the unit owners split that deductible through a special assessment. In a 20-unit building with a $100,000 deductible, that’s $5,000 per owner — on top of your own interior damage.
Loss assessment coverage on your HO-6 helps cover your share. Most policies include only $1,000 or $2,000 by default. You can often increase it for a relatively small premium. But not all assessments are treated the same — deductible-related and special assessments may be handled differently depending on the carrier and endorsement. Ask your agent how yours works.
Home Insurance vs. Condo Insurance
A standard homeowners policy (HO-3) covers your entire structure at replacement cost. A condo policy (HO-6) only covers the interior you’re responsible for, and you’re choosing the limit. Two policies work together — the master policy covering the building, your HO-6 covering the inside and your stuff. If your Coverage A limit is too low, nobody catches it until a claim happens.
Three Things to Do Right Now
First, get a copy of your HOA’s master policy declarations page. Find out whether it’s bare walls, single entity, or all-in. Second, review your HO-6 Coverage A limit — walk your unit and estimate what it would cost to rebuild everything inside, including upgrades. Third, check your loss assessment coverage and ask your agent how your policy handles different types of assessments.
We Can Help
If you want help reviewing your condo policy, get a quote or give us a call. We serve condo owners across Nevada, Arizona, Utah, and California and can walk you through exactly what you have and what you might be missing.
For more, watch our videos on HOA vs. homeowner claims, whether you’re underinsured, and water damage your insurance won’t cover.
