Q:

What is an HO-6 Insurance Policy?

A:

Quick Answer

HO-6 insurance is like homeowner's insurance for condominiums, according to the Massachusetts Real Estate Law Blog. It covers things such as upgrades and fixtures added after the move-in date and is required by many companies that hold mortgages on condos.

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Full Answer

HO-6 insurance is an add-on to regular condo insurance. It provides liability protection for the actual condo unit and the belongings inside and picks up where condo insurance leaves off. It covers things such as fire, burglary, vandalism, hail and lightning damage.

Today, most mortgage companies require HO-6 insurance thanks to changes in FHA and Fannie May policies. It is available in many states, including Texas, Alaska, Nebraska and Utah, and like other types of insurance, premiums and deductibles vary depending on the policy.

HO-6 insurance comes with a few benefits. One of these benefits is that it offers gap insurance to help cover high deductibles for other policies. Although the price of coverage varies, it is usually inexpensive and has a low deductible. Another benefit to this type of coverage is that it helps with improvement and upgrades to the unit, notes the Massachusetts Real Estate Law Blog.

As is outlined by the new lending rules, HO-6 insurance must provide enough coverage to take care of at least 20 percent of the condo's appraised value.

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