Personal Finance

Best Condo Insurance (HO-6)

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If owning a condominium is your family’s idea of the perfect living situation, there are a few things you will need to keep in mind. One of them involves insurance, as condo policies are a bit different than the homeowner’s policies you might be accustomed to buying.

You may have never heard of HO-6 insurance, but if you’re thinking about buying a condominium, it definitely needs to be on your radar. However, condo insurance is quite a bit different than your standard homeowner’s insurance policy, so there are a few things that you need to know first.

Let’s talk a bit about condo insurance and what makes it unique. Then, we will discuss some of the best insurance providers available today.

What is an HO-6 Policy?

If you are shopping around for condominium insurance, you have probably come across the term HO-6 coverage. This type of policy is specifically designed for condominium owners to cover their dwellings, belongings, and family members.

Why HO-6? Well, each type of residence insurance policy is coded differently. Renters insurance, for example, is HO-4, while your standard homeowner’s policy is an HO-2. You probably won’t hear either of those mentioned when buying renters or homeowners coverage, but HO-6 tends to come up often when shopping for a condo policy.

Related: Best Renters Insurance

What Condo Insurance Covers

When you buy a homeowners insurance policy, you know that it will cover your dwelling (inside and out), its inhabitants, and the belongings inside. You may also have personal liability coverage, as well as be protected in case your home becomes uninhabitable.

With HO-6 policies, you are protected in the following ways:

  • The interior of your dwelling is covered. This includes walls, fixtures, flooring, etc. and improvements that you have made to your unit.
  • Your personal property inside the condo is covered.
  • You have loss-of-use coverage in case your dwelling becomes uninhabitable due to an event such as a fire.
  • You have personal liability coverage, in case you are sued for damages that occur outside the home (like your dog biting someone on the sidewalk).
  • You’re covered in case someone gets hurt in your home.

What Condo Insurance doesn’t Cover

You might be wondering how an HO-6 policy differs from a typical homeowners insurance policy, especially since it sounds pretty similar at this point.

Condo insurance doesn’t cover anything more than you’ll find in a homeowners policy. However, there are a few things that it does lack.

Condo insurance does not cover:

  • The actual building structure (so fires, earthquakes, and floods are out)
  • Public common areas, such as stairways, elevators, lobbies, etc.
  • Exterior features of the building, such as the roof
  • Shared amenities, like a pool or tennis courts
  • Injuries that occur in common areas

For those, you would actually rely on your building’s HOA policy.

An HOA master insurance policy is in effect to cover these sorts of things. This HOA policy will cover the actual building, public areas, and amenities. It will also step in if guests are injured in common areas.

Depending on the type of HOA master policy your building holds, certain aspects of your unit might also be protected. For instance, all-in coverage will protect everything that was originally built into your unit, such as cabinets, original fixtures, flooring, and the like. If you make improvements to these, they will then fall under your personal policy.

Bare walls coverage, on the other hand, will only cover the structure and the common areas of the building. Everything inside your home--even if it was put there as a permanent fixture when your unit was built--is your responsibility.

The Good News

You will be required to purchase condo insurance when taking out a mortgage on your new home. Just because your building has an HOA master policy doesn’t mean that you can skip out on buying your own coverage for your unit. In fact, your condo policy is designed to pick up where the building’s HOA policy leaves off.

There is good news, though. Since your personal condo insurance policy is intended to cover the interior of your unit and the belongings it contains--but not the structure itself--it’s typically much cheaper than normal homeowners insurance. The average condo insurance policy costs only $478, compared to homeowner’s policies which run an average of $1,083.

Related: Best Home and Auto Insurance Bundle

Best Condo Insurance

So, who has the best HO-6 coverage around? Let’s look at some of our favorite condo insurers, and why they’re worth a look if condo life is the life for you.

Lemonade

If you’re looking for ‘easy’, Lemonade might be just right for you. This insurance company not only seeks to make buying coverage easy to understand but claims are paid out quickly (many are immediate!) and the whole process is a snap.

They have a straightforward app, designed to simplify your experience. There, you can shop for coverage, click through to make a claim, submit a video explaining losses, link your bank account for instant claims payouts, and even request extra coverage for big-ticket items.

If you are passionate about doing good in your community--while also easing the insurance claims process--you’ll love Lemonade’s Giveback program. Through it, you’ll be able to choose a cause that is meaningful to you; at the end of the year, [wp_shortcode_42] will take the profits recognized by fewer-than-expected claims and give back to local and global causes. Because Lemonade takes a fixed fee out of monthly premiums to cover their expenses--rather than relying on these leftover funds as annual profits--it’s easier for customers to actually get claims approved and paid.

Reasons to choose Lemonade:

  • The process is simple, whether you sign up online or through the mobile app.
  • Many claims are paid out via immediate bank transfer.
  • No brokers, no high-pressure sales, no commissions just quick and easy coverage at killer savings.
  • You can make changes to your policy, submit claims, or update your coverage through the mobile app.
  • Lemonade covers its business expenses from fixed fees (taken out of customers’ monthly premiums). This means that your claims aren’t eating into their annual profits so it’s easier for them to approve and pay out anytime you suffer a loss!
  • If there’s money left over at the end of the year, Lemonade doesn’t just keep it for executive bonuses--they give it back to the causes that you choose.
  • Lemonade covers your belongings anywhere in the world. This means that if your laptop gets stolen at school or from the coffee shop, it’s still covered.

Visit Lemonade or Read the Full Lemonade Review

Liberty Mutual

Looking for a more traditional insurance company? Then you’re in luck, as Liberty Mutual offers condo insurance at competitive prices, no matter where in the U.S. you live.

With Liberty Mutual, you’ll enjoy:

  • Personal property, dwelling, and liability coverage standard with all condo policies.
  • The opportunity to easily add on blanket jewelry or computer & smartphone coverage.
  • Discounts for remaining claim-free for five years or more.
  • Discounts for bundling other types of coverage, such as your auto insurance.
  • A highly-rated mobile app that makes managing your policy (and claims) easier than ever.
  • Optional Inflation Protection, which will not only give you an added discount on premiums but also adjust coverage limits automatically to keep up with inflation (and protect you against loss).

Visit Liberty Mutual

Policygenius

Want to shop around for the perfect coverage at the right price, but don’t have hours to spend getting quotes from insurers? This is where the right insurance aggregator--such as Policygenius--comes into play.

With Policygenius, you only need to enter your information one time. Once you click Submit, you’ll be matched with 10+ top insurers, in an effort to find you the best rates and coverage options available. The entire questionnaire takes about 3 minutes to complete, and its pretty standard stuff: you’ll be asked your address, the occupants (including any dogs), the safety equipment in the home, and whether or not you have certain risky features (such as a trampoline or swimming pool).

Once Policygenius has finished seeking out your pricing options, they will email you with the results. The process isn’t instantaneous, as with some aggregators, but it does have one notable benefit: you won’t be getting quotes (which could change when it comes time to buy a policy), but actual prices from the insurance companies themselves.

Some reasons for shopping through Policygenius:

  • You can shop for providers who will also offer you bundle discounts (auto+home).
  • You’ll enjoy true prices, rather than estimated quotes that can change once you go to actually buy the policy.
  • Your information will be matched with 10+ top insurance companies, ensuring that you have plenty of options for coverage after only entering your information once.
  • Customized suggestions for coverage will be given based on your home and location.

Visit Policygenius or Read the Full Review

Young Alfred

Young Alfred doesn’t directly insure customers. Instead, it’s a website that helps people find the coverages they need and compare quotes from multiple other insurers.

When you use Young Alfred, you’ll have to provide some basic information about your condo, like its address. The website uses that information to analyze your property’s risks. It might find that your condo is at high risk for mold-related damages or bursting pipes, but that it’s a low theft risk or low risk for damage caused by an earthquake.

Based on this risk assessment, you can customize your insurance policy to include higher levels of protection for your condo’s true risks and lower levels of protection for the others. This can help you pay only for the coverage you really need, helping you save money.

Based on these customizations, Young Alfred will give you quotes from multiple top insurers, making it easy to compare their offers and choose the best one for your needs.

Visit Young Alfred

Allstate

Another familiar name in the insurance world (and the 4th largest insurer in the world), Allstate offers condominium coverage with plenty of options to suit. They allow you to build the exact coverage that fits your family’s needs, so you can feel protected in and out of your home.

With Allstate, you’ll enjoy things like:

  • Loss assessment coverage, building code coverage, and even green improvement reimbursement.
  • Discounts for bundling multiple policies, such as your home and auto coverage.
  • Special pricing for retirees, new homebuyers, and those with certain protective devices in their homes (like fire extinguishers and smoke detectors).
  • A highly-rated mobile app that allows you to easily conduct room inventories (helpful in case of a loss later on!), view policy documents, change coverage, and develop a fire escape plan. You can even open a text message chat with an agent to discuss your concerns!

Visit AllState

Bottom Line: You Need Condo Insurance

If you live or plan to live, in a condominium, it’s important to get the right insurance policy. Even though your HOA master policy will cover many things, it won’t protect you and your belongings against any number of situations.

Finding the right HO-6 policy--for the right price--can be tricky. By shopping around through trusted insurance companies (and/or aggregators), you can ensure that you not only buy the coverage that meets your needs, but that you get it at the best price possible.

Related: Questions to Ask Before You Buy a Home With an HOA

Stephanie Colestock

Stephanie Colestock

Stephanie Colestock is a respected financial writer based in Washington, DC. Her work can be found on sites such as Investopedia, Credit Karma, Quicken, The Balance, Motley Fool, and more, covering a range of topics such as family finances, planning for the future, optimizing credit, and getting out of debt.


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