What is covered on an HO6 or “Walls In” policy?
The HO6 policy form is a product that was designed to address the unique coverage issues that exist for condominium owners, who have purchased a unit of space inside a larger structure. Often times, the building and operations of the common property are set up and managed by a Condominium Association, which operates like any other Homeowners Association (HOA). Condo owners must sign and agree to abide by rules and regulations, which are defined in their ownership or lease agreement. One common requirement is that each unit owner purchase and provide proof of liability insurance protection. Typically, the minimum limit of liability is $1,000,000 and requires that the Condo Association be named as an Additional Insured on each unit owner’s policy. This provides coverage in the event someone is injured inside the owner’s condo, but also in the event an condo owner becomes legally liable for damages to other condo units or the building itself. Although the Condo Association will carry a Master Policy, which insures the building and liability for common areas, if a condo unit owner’s tub overflows and causes damage to units below, as well as the building itself, then that condo owner’s HO6 will be asked to respond to claims to pay for the repairs of those damages.
With regards to the property aspect of this product, it provides coverage for your personal belongings with an amount of coverage that the insured selects. It also provides coverage for additions, improvements, and alterations, that you’ve made from the “Walls In”. So, new cabinets, floor coverings, or a kitchen island that you paid to have installed become part of your improvements and if set up correctly, your HO6 will respond and cover these items in the event they are damaged by a covered loss. These policies also include Assisted Living Expense (ALE) coverage, which pays for expenses incurred for temporary housing, which might be necessary, while the covered damages are repaired. Depending on the location, a condo owner may also need earthquake, flood, or special windstorm coverage. If you have or are considering purchasing an HO6 policy for your condo, it’s critical that you pay close attention to deductible options. There’s been a fair amount of movement with deductibles in recent years. It’s possible that you’ll have a higher deductible for wind & hail and quite possibly, an even higher deductible for “named storms”. The HO6 is a very unique product and it’s important that you work with your agent to be sure you’re covered properly.