What is Condo (HO6) Insurance?
April 9, 2020 by Brad Davis
Are you buying your first beach condo unit? Are you wondering... What is a HO6 Insurance policy? What does Condo Insurance cover? How much does HO6 Insurance cost? How much is ocean front condo insurance?
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Let's get into each one of these and a little more...
What is a HO6 Insurance policy?
The HO6 policy is a form of Homeowners Insurance that is specifically designed for the owner of a condo unit. The Insurance Services Office (ISO) standardized many insurance policies such as the Home Owners Form 6 (HO6). Most insurance carriers use this form for Condo Unit Insurance Policies, but it is important to note that some carriers have their own proprietary form that differ from the standard HO6 insurance policy.
You may be thinking that the Homeowner's Association has insurance so you don't need additional insurance. This is a common misconception - the insurance held by the HOA typically only covers what is required to be covered according to the HOA bylaws. This leaves a huge gap of coverage that you should protect yourself from.
Simply put, the HO6 policy provides coverage to the condo unit owner for their belongings and interests that are not covered by the HOA's master insurance policy.
What does Condo Insurance cover?
You should find the following coverages in a typical condo (HO6) policy:
- Dwelling: Coverage for the unit, for things such as walls, fixtures, additions, or upgrades.
- Personal Property: Coverage for your contents. This includes furniture, electronics, clothes, dishes, and generally about anything in the unit that is not nailed down.
- Loss of Use: Provides coverage for Additional Living Expense or Fair Rental Value due to a loss from a covered claim.
- Personal Liability: Coverage for a claim or suit brought against an insured.
- Medical: Coverage for guests that may get injured on the premise or caused by an insured.
This is not a complete list of coverage included in a HO6 policy; nor the limitations, conditions, or exclusions. Please read your complete policy as it will determine coverage.
Losses covered by a HO6 insurance policy may be caused by: Fire or lightning, wind and hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, vandalism, theft, falling objects, as well as other perils.
Typical perils not covered by a HO6 insurance policy are: Earth movement (earthquake), flood, neglect, war, and other things.
A condo insurance policy (HO6) is very similar to a home insurance policy (HO3). While there are some differences; the main difference is simply that the HO6 policy is designed for the condo unit owner, where the insured does not need coverage for the whole building.
Who needs HO6 Insurance in Myrtle Beach and South Carolina?
If you have a mortgage on your condo, the chances are that the lender will require a HO6 insurance policy. If you don't have a mortgage, why risk such a possible financial loss when the premium can be so reasonable? I talk about the cost below.
So what if you don't live in the condo unit? For the most part, condo insurance policies are pretty flexible. The HO6 policy can typically be written for the owner if it is occupied as a primary home, secondary/seasonal home, or even as a rental unit. If you are the tenant that is renting the unit you should purchase Renters coverage, as the HO6 will not extend coverage to you and your belongings.
Hurricane coverage for condo units
If you purchase a condo insurance policy, it should have hurricane coverage. I have heard probably a hundred times someone say "I don't need hurricane coverage because the master policy covers it". Somewhere, someone is feeding misinformation to condo unit buyers. Yes, the HOA's master insurance policy should cover hurricane damage; as well as fire, smoke, etc. But the unit owner needs coverage for hurricanes and these other perils for damage done to the inside of the unit.
There are some insurance carriers that may exclude hurricane coverage (wind and hail) for condos units near the ocean. In that case it may be possible to get a separate policy to cover wind and hail. However, our agency offers HO6 insurance through several carriers and so far we have been able to insure every condo unit with a single policy including hurricane coverage.
Just a heads up - some HO6 policies do not cover damage caused by wind driven rain. Wind driven rain is essentially water damage caused by rain when there is no damage to the exterior.
Vacant Condo Insurance
It is important to note that a HO6 policy (and most forms of home insurance) have requirements for coverage when a home is unoccupied or vacant. Typically a home is considered unoccupied or vacant if it is left empty for 60 or more days. If your home is considered unoccupied or vacant your policy may require things such as the water being drained and turned off as well as the heat and air set at a safe temperature to be covered for a loss. Read your policy for full details on this!
If your condo unit is for sale or going to be vacant or unoccupied for an extended period of time you should also discuss this with your insurance agent. There may be a different policy that will provide better coverage.
Earthquake & Flood Insurance for condos
Note that damage caused by earthquakes and floods are usually not covered by a HO6 policy. Several insurance carriers do offer endorsements to add earthquake and/or flood damage to their policy. If it is not available by endorsement, there is also the option to purchase a separate policy for earthquake or flood.
As mentioned above about hurricane coverage - earthquake or flood damage may be covered under the HOA's master insurance policy; however it likely does not give coverage to the interior of the condo unit.
How much does HO6 Insurance cost in Myrtle Beach?
Well this depends on how much coverage you need and how good of a policy you want. How much coverage you need depends on how much of the dwelling is covered by the HOA's master insurance policy (according to the HOA bylaws) and how much the replacement cost is for your contents.
A basic policy can start around $200 per year, but the amount of coverage that comes with it is rarely recommended. The best way to know the cost is to get a quote. Give us a call, we can typically give you some figures or a quote in a few minutes.
A HO6 insurance policy for an ocean front condo unit in Myrtle Beach, South Carolina will start around $450 for the year. While there are some options that are cheaper, we recommend to purchase coverage you need instead of trying to save a few dollars.
Like other types of home insurance, there are many things that can affect your condo insurance premium. Some factors are; distance to the ocean, age of the condo, prior losses, amount of coverage, endorsements, insurance score, and a slew of other things.
Why choose Davis Insurance Associates for Myrtle Beach Condo Insurance?
We take the time to discuss your situation and needs to not only find you an affordable HO6 insurance policy, but to find a policy that is right for you. As an independent insurance agency we represent many carriers, and when the standard (or admitted) market does not fit we have great products through the excess and surplus (or non-admitted) market. Like other home insurance policies, a condo insurance policy should act as a foundation to protect you against financial distress. Take the time to work with an experienced and local agent so you get the protection you need.
If you are looking for condo insurance on an ocean front condo unit or condo insurance elsewhere in South Carolina, we can help.
Are you ready to get a Myrtle Beach HO6 insurance quote?
Call (843) 213-0000 or CLICK HERE!
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