Understanding the different types of homeowners insurance policies is essential for ensuring proper coverage. HO3 and HO6 insurance policies are two of the most common types for home coverage; and while they do share some similarities, they are designed for different types of property ownership and offer distinct coverage needs. Additionally, it is essential to consider adding flood insurance to any HO3 or HO6 policy to safeguard yourself financially against potential water related disasters. Let’s explore the difference between HO3 and HO6 policies, highlight their key differences, and why flood insurance is an essential add on.
What is an HO3 Homeowners insurance Policy?
An HO3 policy, also known as a standard homeowners insurance policy, is designed for single family homes. It provides coverage for the structure of the home, personal belongings, and liability protection against lawsuits.
Coverage Under HO3 Policies Generally Includes:
- Dwelling- Protects the structure of your home, including walls, roof, and foundation.
- Other Structures- Covers detached structures such as garages, fences, and sheds.
- Personal Property- Protects personal property and belongings inside the home, like furniture and electronics.
- Loss of Use- Covers additional living expenses incurred if your home is deemed uninhabitable due to damage sustained from a covered peril.
- Personal Liability- Provides financial protection from a lawsuit if someone is injured on your property or property damage caused by a non-resident.
- Medical Payments- Provides medical coverage in the event someone is hurt or injured on your property.
What is an HO6 Homeowners insurance Policy?
An HO6 policy, often referred to as condo or condominium insurance, is specifically designed for condo owners. Unlike an HO3 policy, which covers the entire home, an HO6 policy does not cover the entire building but rather protects the interior of the unit including additions and improvements and personal belongings.
Coverage Under HO6 Policies Typically Includes:
- Dwelling (Interior Unit)- Covers paint, flooring, walls, cabinets, and other structure components located inside of your unit damaged after a covered loss.
- Personal Property- Protects personal property and belongings inside the unit, like furniture, clothing, and electronics from named perils.
- Loss of Use- Assists with temporary living expenses if the condo becomes uninhabitable due to a covered peril.
- Personal Liability- Provides coverage if a non-resident is injured or causes property damage inside the condo unit.
- Medical Payments- Provides coverage in the event someone is hurt or injured on your property.
Note: It is typically the responsibility of the condominium association’s master policy to cover the exterior structure of the building and the common spaces of the property. It is essential as a condo owner to review your association’s master policy to understand where your personal coverage responsibilities begin and end.
Why You Should Add Flood Insurance
Standard HO3 or HO6 policies do not include flood insurance, which is crucial for both homeowners and condo owners alike. Many owners assume because they have homeowners or condo owners insurance, they are protected against “rising waters” or flooding, but standard policies exclude flood-related damage. Flooding can happen anywhere, and it is extremely costly to repair your home and belongings.
Choosing the Right Coverage for Your Home
Whether you own a home or a condo, work with your agent to select the right homeowners insurance policy for financial protection and peace of mind. If you own a single-family home or live in a townhouse/rowhouse not covered by an association’s master policy, an HO3 policy is necessary to cover the entire structure and your personal belongings. If you own a condo, an HO6 policy is vital to cover the interior of the units and personal property.
No matter which policy you have, adding flood insurance ensures you are not left financially vulnerable in the event of a flood. The unpredictable nature of weather events and increasing instances of extreme flooding means investing in flood insurance is a wise decision for any property owner.
At Windward Insurance Agency we're here to guide you through the insurance process and are committed to helping you find the right coverage for your home and personal needs. Contact us today to learn more about HO3, HO6 and flood insurance options tailored to your unique needs.
