Condominium associations provide master policy insurance coverage, but a master policy usually covers only the building’s exterior and common areas. To have coverage for what is inside your condo unit, an H06 insurance policy is usually recommended and, in most cases, required, especially if there is a mortgage on the property.
Generally, there are three different kinds of condo association policies:
All-in and all-inclusive: All of the condo's exterior and interior surfaces, including fixtures, installations and additions are covered. You will still need a policy to cover your personal property.
Special entity: This is similar to the all-inclusive policy, except that fixtures, improvements and additions are not covered. This type of coverage also requires additional personal property coverage.
Bare walls-in and wall studs-in: This type of policy offers the least amount of coverage where only the bare structure is insured. You will need to have a policy that protects your condo’s interior, including your personal property.
The H06 insurance policy protects your individual condo and covers damage to interior walls, floors and ceilings caused by: theft, vandalism, smoke damage, frozen pipes, fire, some weather events, and damage caused by surrounding condo owners’ units such as a leak from an above unit. It will usually cover water leaks if they're sudden or accidental, however, if a water leak occurs because of gradual damage you could reasonably be expected to be aware of, it may not be covered.
An H06 policy usually protects you against a liability claim if someone is injured in your unit, and coverages generally range from $100,000 to $500,000. H06 policies also cover your personal belongings, which are generally defined as anything you can take with you if you move. Make a list of your personal belongings and be sure to value your possessions properly for what it would cost to replace them now.
Lauren Bunting is an Associate Broker with Atlantic Shores Sotheby’s International Realty in Ocean City, Maryland.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
