Two policies, two jobs
The association's master policy covers the building structure and common areas according to the condominium documents. Your HO-6 policy covers your interior improvements, belongings, personal liability and loss of use if the unit becomes unlivable.
Which items belong to the building and which to you depends on the declaration, so read how the documents define the unit. Some buildings insure everything from the walls out, others only the bare structure.
What an HO-6 covers
Typical coverage includes interior finishes and fixtures you are responsible for, personal property, liability, additional living expenses and loss assessment coverage. Choose limits that match the real cost to rebuild your interior, not the purchase price.
Ask your insurance agent to compare replacement-cost and depreciated-value settlements for your belongings, and check the hurricane deductible, which is often a percentage.
Loss assessment: the clause worth reading
If the association faces a large uninsured loss or underfunded repairs, it can charge owners a special assessment. Loss assessment coverage may help pay your share for a covered event, but it has limits and exclusions, so confirm what it does and does not cover.
Do not confuse it with coverage for maintenance shortfalls: ordinary underfunded reserves are usually not an insured event.
Flood and other gaps
Neither a master policy nor a standard HO-6 usually covers flood damage to your unit's contents or improvements. Ask whether the building carries a flood policy and whether you should buy contents or interior flood coverage, especially on lower floors or in high-risk zones.
Ground-floor and low-lying units in coastal areas deserve a separate conversation with an insurance agent.
What lenders and associations require
Many lenders require proof of an HO-6 policy and evidence that the association's master policy is adequate. Some associations also set minimum liability coverage for owners. Ask for these requirements during your inspection period.
The condominium budget and insurance summary in the association documents show the master policy limits and deductible.
Common mistakes condo buyers make
Buyers often assume that the building's insurance covers everything inside their unit, then discover that flooring, cabinets, fixtures and belongings are theirs to insure. Others buy an HO-6 policy with low limits that would not rebuild the interior after a major loss.
A third mistake is ignoring the association's insurance summary. If the master policy has a high deductible or limited coverage, a loss can turn into a large assessment for every owner.
What to ask for in the documents
Request the association's insurance certificate or summary, the deductible, the building's coverage limits, whether flood is included and any recent claims or increases. The budget should show the insurance line and how it changed from last year.
If the premium rose sharply, ask whether the association raised fees or planned a special assessment to cover it.
Checklist before you close
Confirm what the declaration says you own and insure. Get an HO-6 quote with loss assessment coverage and a clear hurricane deductible. Ask whether the building has flood coverage and what is left to you. Send the lender the proof of coverage in time. Add the premium to your monthly cost and compare it with other buildings.
Next step
Request quotes for the exact unit and add the premium to your monthly cost. Lidiya Tretyak is a licensed Florida real estate agent with Douglas Elliman and speaks English, Russian and Ukrainian; the first consultation is free.
This guide is general information, not legal or tax advice. Laws and programs change — confirm details with a Florida attorney and a US tax professional.
