What Is HO4 and HO6?
HO4 is renters insurance for tenants. HO6 is condo insurance, covering your unit's interior and belongings where the HOA's policy leaves off.
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Renting or owning the walls
If you rent your place, you need an HO-4. It covers your belongings, liability, and living costs if you're displaced, since the building itself is someone else's to insure. If you own a condo or townhome, you need an HO-6 instead. The HOA's master policy usually covers the building's structure and common areas, but where that coverage stops depends on the HOA's bylaws and the master policy itself, worth pulling and reading. Your HO-6 picks up from there. It covers the walls, floors, and fixtures inside your unit, any upgrades you've made, your personal property, and liability for things that happen inside your own four walls. Get this wrong and you end up with gaps neither policy fills, or coverage you're paying for twice.
What your HOA's policy won't cover
Master policies vary, and so does the coverage HO-6 buyers choose. Compare policies to find enough dwelling coverage for your unit's interior and the right loss assessment limit for your HOA.
When a neighbor's water damages your unit
Water from the unit above you is one of the most common claims condo owners deal with, and who pays depends on where the water started and what each policy covers. If a pipe in your neighbor's unit bursts and floods your ceiling and floors, your HO-6 typically pays for the damage to your unit and belongings, and then may seek reimbursement from the neighbor's policy or the neighbor directly. You file with your own insurer first rather than waiting to find out whose fault it was. That's one reason the interior coverage amount on your HO-6 matters as much as it does.
Loss assessment coverage is the part people understand least until they get a bill. If the building has a loss, like a fire in a shared stairwell or storm damage to the roof, the master policy usually pays for the repair. But if the damage exceeds what the master policy covers, or if the master policy carries a high deductible, the HOA can pass that cost to unit owners through a special assessment. Loss assessment coverage on your HO-6 pays your share of that bill, up to the limit you've chosen. A low limit might leave you covering several thousand dollars out of pocket after a loss that had nothing to do with your own unit.
Figuring out how much loss assessment coverage to carry starts with the HOA's master policy, specifically its deductible and how it's structured. Some master policies carry deductibles in the tens of thousands, and if that deductible gets assessed across all unit owners, your share could be real money. The HOA's governing documents or a call to the HOA board can tell you the master policy's deductible and whether the bylaws allow the HOA to pass it along to owners. That number is a better guide to your loss assessment limit than a guess.
Townhomes complicate this further because not all townhome communities have a master policy at all. Some HOAs insure only shared land and amenities, leaving each owner responsible for insuring their own structure, inside and out, similar to a standalone house. Others cover the exterior walls and roof the way a condo master policy does. The dec page from the HOA, or a direct question to the board, settles which kind of community you're in, and that answer changes whether your own policy needs dwelling coverage for the whole structure or just the interior.
What happens to your deductible when a claim involves both policies
When a loss touches both your unit and the building, you're not just dealing with one deductible. The master policy has its own, and your HO-6 has its own, and depending on how the HOA's bylaws are written, you might end up responsible for the master policy's deductible on top of yours. Some HOAs bill that deductible back to the owner whose unit was the source of the loss, or split it among owners through assessment, regardless of who caused it. This is worth asking the HOA board directly, since it rarely shows up in plain language until a claim forces the question.
Some HO-6 policies include a specific endorsement for this, often called loss assessment for deductible or HOA deductible coverage, separate from the general loss assessment coverage for shared-area damage. It pays toward the master policy's deductible if it gets passed to you. Without it, a five or ten thousand dollar master policy deductible assessed to your unit comes straight out of pocket, even though your own HO-6 deductible might be a few hundred dollars for the same event.
Betterment coverage is the other piece that trips people up, especially in older buildings or units that have been renovated since they were built. If the original unit came with builder-grade countertops and flooring, but a previous owner upgraded to stone counters and hardwood, the master policy's standard rebuild provision may only account for the original materials. Your HO-6 needs enough interior coverage to rebuild what's actually there now, not what the building had when it was constructed. This is one of the more common reasons unit owners find themselves underinsured after a loss, and it's worth checking against the current condition of the unit rather than assuming the HOA's policy fills the gap.
Who carries which coverage, and at what limit, often comes down to the specific language in the HOA's governing documents, called a bylaw rider or insurance clause depending on the state and the association. Two condo buildings next door to each other can split responsibility differently. Reading that section, or asking the board for a plain summary, tells you what your HO-6 actually needs to cover rather than relying on what's typical elsewhere.
Before you compare quotes
Pull the HOA's master policy or ask the board for its deductible and what it covers. That number, plus the current condition of your unit, tells you what dwelling and loss assessment limits your HO-6 actually needs.
