What Is Walls-Out Home Insurance?
It covers everything from your drywall inward, like fixtures and flooring, leaving the building's structure to the HOA's master policy.
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The master policy usually covers the building's structure and common areas, but where it stops depends on whether it's a bare-walls or all-in policy, and that changes what your HO-6 needs to pick up. A bare-walls master policy leaves cabinets, countertops and built-in fixtures to you, even the ones installed when the unit was built. Your HOA or property manager can tell you which type the building carries. Once you know that, you can set your HO-6 dwelling coverage to match, instead of guessing.
Matching Your HO-6 to the Master Policy
Getting the dwelling coverage wrong on a bare-walls building means paying out of pocket to rebuild your own kitchen. Comparing HO-6 policies lets you set that number correctly instead of guessing.
What Happens When a Neighbor's Pipe Floods Your Unit
Water does not respect property lines, and in a condo building it rarely stays in one unit. If a pipe bursts in the unit above yours and water comes through your ceiling, the question of who pays splits into pieces. The master policy may cover the repair to the building's structure, the drywall and ceiling itself if the building is all-in, or it may not, if the building is bare-walls. Either way, the master policy usually does not cover your flooring, your furniture or your own drywall finish. That is what your HO-6 is for.
Your HO-6 also carries loss of use coverage, which pays for a hotel or temporary rental if the unit is unlivable while repairs happen. That coverage runs regardless of whose pipe caused the leak. Separately, if it turns out the upstairs neighbor was careless, like ignoring a slow leak for months, their own liability coverage may owe your insurer money back through a process called subrogation. That happens behind the scenes between insurers and is not something you need to sort out yourself.
Loss assessment coverage handles a different problem. If the building's master policy pays for the shared repair but the HOA still has to cover a gap, like a high deductible on the master policy, the HOA can issue a special assessment to every unit owner to cover that gap. Most HO-6 policies include a set amount of loss assessment coverage, often a few thousand dollars, and it can usually be raised for a modest cost. Given how high some master policy deductibles run, especially after a large claim like a fire or major water loss, checking this number against what the HOA's governing documents allow is worth doing before a loss happens, not after.
Townhome insurance works differently depending on how the property is structured. Some townhomes are covered like condos, with an HOA master policy over shared walls and roofs and an HO-6 for the owner. Others are treated more like single-family homes, where the owner insures the entire structure, walls, roof and all, under an HO-3 policy, even though the home shares a wall with the one next door. The HOA's governing documents and the deed will say which applies. Mixing this up means either paying for coverage already provided elsewhere or leaving the structure itself uninsured.
How Much Personal Property and Liability Coverage Does a Unit Need
Personal property coverage on an HO-6 pays to replace what is inside the unit if it is stolen, burned or otherwise destroyed. Furniture, electronics, clothing, kitchenware, all of it. The number to set is not what the unit is worth. It is what everything inside would cost to replace at today's prices. Walking through each room and adding up replacement cost, not resale value, gets closer to the right figure than guessing a round number.
Liability coverage pays if someone is hurt inside the unit or elsewhere and the owner is found responsible, covering legal costs and any judgment up to the policy limit. A standard HO-6 includes a baseline amount, often a flat figure like $100,000 or $300,000 depending on the insurer. Someone with meaningful savings or assets to protect may want a higher limit, since a lawsuit over an injury can run well past that baseline. An umbrella policy is another way to add liability coverage above the HO-6 limit, and it is worth asking about once the unit's liability needs are understood.
Scheduled personal property is a separate line for items worth more than a standard policy will pay out for, like jewelry, art or a collection of some kind. Without scheduling these items individually, a claim on them may be capped well below their actual value. The declarations page lists any sub-limits already in place for categories like jewelry or electronics, and that is the place to check before assuming everything in the unit is covered at full value.
Ordinance or law coverage is worth a mention here too. If a unit is damaged badly enough that local building codes require upgrades during the rebuild, like updated wiring or fire suppression, that cost can exceed what the HO-6's base dwelling coverage anticipates. Older buildings are more likely to trigger this. Asking whether the policy includes it, and how much, rounds out what a unit actually needs beyond the walls-in basics.
Before You Compare
Pull your HOA's governing documents and master policy declarations to see if the building is bare-walls or all-in, then check your loss assessment limit against the master policy's deductible. Those two numbers decide what your HO-6 needs to cover.
