Walls-In vs All-In Master Policies
An all-in master policy covers original fixtures and finishes. Walls-in leaves those to your own HO-6 policy.
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Check the HOA's governing documents or ask the board which type the association carries, since it decides what your HO-6 needs to cover. Under all-in, your policy mainly needs to cover your belongings and any upgrades you made. Under walls-in, which is more common, you're responsible for everything from the drywall inward. That means cabinets, flooring, built-ins, even the fixtures that came with the unit. Insuring too little there means paying out of pocket to rebuild your own kitchen after a fire the master policy never touches.
Match your HO-6 to what the master policy skips
A walls-in HO-6 priced for an all-in building leaves your kitchen and floors underinsured. Compare quotes built around your HOA's actual coverage, not a guess.
What happens when a neighbor's pipe floods your unit
Water damage in a condo building rarely stays in one unit. Who pays depends on where it started and whose negligence caused it, if anyone's. If a pipe bursts inside your neighbor's walls and water comes through your ceiling, their HO-6 liability coverage may pay for your damage if they're found responsible. If the leak starts in a common-area pipe, the master policy's liability coverage is more likely to apply. In practice, your own HO-6 often pays first, since your insurer can cover your unit's damage and then seek reimbursement from whoever caused it. That's faster for you than waiting on someone else's claim to sort out fault.
Loss assessment coverage matters here too, and it works differently from the liability question above. When a loss affects common areas or multiple units and the HOA's master policy doesn't fully cover the repair, the HOA can issue a special assessment that splits the remaining cost among all owners. Loss assessment coverage on your HO-6 pays your share of that bill, up to the limit you chose. A burst pipe in a shared wall, a fire in the lobby, or storm damage to the roof can all trigger an assessment even though the damage never touched your unit directly.
Most HO-6 policies include a modest amount of loss assessment coverage by default, often a few thousand dollars. That may not be enough if the building's master policy carries a high deductible or limited coverage for a major loss. Some associations have master policy deductibles in the tens of thousands of dollars, and that deductible itself can become the assessment if the HOA doesn't keep reserves to cover it. Ask the board what the master policy's deductible is. That number is a reasonable floor for how much loss assessment coverage to carry.
Townhomes complicate this further because not every townhome belongs to an HOA with a master policy. Some townhomes are individually owned structures with no shared walls covered by an association. In that case the owner needs a standard HO-3 policy that covers the whole structure, not an HO-6. Others share walls and sit under a master policy much like a condo does. Check the HOA documents, if one exists, before assuming which type of policy applies to your situation.
What loss assessment coverage actually pays for
Loss assessment coverage on an HO-6 policy is separate from the liability question of whose pipe burst. It pays when the HOA bills every owner for a shared cost the master policy didn't fully cover, regardless of fault. A fire in a stairwell, storm damage to the roof, a lawsuit settled against the association. None of that has to touch a specific unit for an assessment to land in an owner's mailbox.
The amount an owner needs depends on the master policy's deductible and how thin its coverage runs on major perils. A building with a modest deductible and solid wind or fire coverage rarely passes along a large bill. A building with a high deductible, say fifty thousand dollars, has that whole figure sitting there as a likely assessment the moment a covered loss happens. The HOA has to come up with it somehow, and reserves often don't stretch that far.
Boards are required to disclose financial details in most states, including the master policy's deductible and how much is held in reserve. Those numbers are the actual basis for deciding how much loss assessment coverage to carry on an HO-6, not a guess at what sounds safe. An owner in a building with a fifty-thousand-dollar deductible and thin reserves is taking a real risk carrying the policy default of a few thousand dollars in assessment coverage.
The gap between what an HO-6 includes by default and what a building might actually need is often large enough that raising the limit costs very little relative to what it covers. Assessment coverage is typically priced per thousand dollars of limit. Moving from a low default to a much higher one adds a small amount to the annual premium compared to the cost of paying a five-figure bill out of pocket. Anyone unsure what the association's documents say about deductibles and reserves can ask the board directly. It's a routine question for a board to answer, and the kind of question boards expect from unit owners shopping for coverage.
Before you get quotes
Ask the board for the master policy's deductible and whether it's walls-in or all-in. Those two answers tell you what your HO-6 needs to cover and how much loss assessment coverage is worth carrying.
