If you’re in the market for homeowners’ insurance, the specific type you need depends on the home you own. Two popular choices are HO-3 and HO-6 insurance policies. While they may seem similar at first glance, the policies have key differences, including the kinds of homes they protect.
Read on to learn more about HO-6 vs HO-3, including what each one covers, to help choose the best insurance protection for your home.
Key Points
• HO-3 insurance is the most common homeowners insurance for single-family homes, townhouses, and duplexes, covering structures, attached and detached buildings, and personal belongings.
• HO-6 insurance specifically covers condo unit interiors and personal belongings, with condo associations maintaining master policies for buildings and common areas externally.
• HO-3 policies use “open perils” coverage to protect against all damage types except explicit exclusions, while HO-6 policies use “named perils” covering only specifically listed damages.
• Dwelling coverage differs significantly, with HO-3 protecting entire structures, including roofs, walls, floors, and windows, while HO-6 provides “walls in” interior-only coverage.
• HO-3 policies generally cost more than HO-6 due to the comprehensive coverage scope, with HO-6 typically featuring lower personal property limits than HO-3 policies.
What Is HO-3 Insurance?
In general, what homeowners insurance covers is property and liability. It protects your home and personal belongings from damage due to certain unexpected events like fire or storms, and it also offers financial protection to you and your family members in the event of any injuries or damages to others that you are legally responsible for.
HO-3 insurance is the most common type of homeowners insurance policy for single-family homes as well as townhouses, rowhouses, and duplexes. It covers a house and any attached structures, such as an attached garage; detached structures, such as a shed or fence; and personal belongings, including furniture, electronics, appliances, and clothing.
HO-3 offers protection against a wide variety of risks such as fire, theft, damage caused by hail and windstorms, smoke damage, and more, depending on the specific policy. It also typically covers liability, additional living expenses (if necessary), and medical payments.
This type of insurance covers your home and any attached and detached structures on an “open perils” basis. This means that the structures are protected from all types of losses except any that are explicitly excluded from your policy. Examples of perils that are typically excluded from an HO-3 are earthquakes and floods. (You can buy separate insurance for these.)
What Is HO-6 Insurance?
HO-6 is homeowners insurance for individuals who own condos (it’s sometimes referred to as condo insurance). While a condo association typically has a master insurance policy that covers the building, exterior, and common areas, for the owner of a condo unit, an HO-6 policy covers the interior of the structure and their personal belongings.
In addition, condo insurance may offer coverage for some interior fixtures and appliances, depending on what the condo association’s master policy covers. An HO-6 also provides personal liability coverage and additional living expenses coverage.
H0-6 policies generally protect against risks like fire, theft, damage caused by hail and windstorms, smoke damage, and more, depending on the policy. An HO-6 is a “named perils” policy, meaning it only covers a specific list of damages named on the policy. In terms of damage coverage, it’s less extensive than the open perils policy of an HO-3.
Key Differences Between HO-3 and HO-6 Policies
There are a number of major distinctions between an HO3 and an HO-6, starting with the types of homes the two policies cover. They also offer different types of coverage and protection.
Here are details on how each policy works and what it offers.
Who the Policy Covers
HO-3 policies are intended for the owners and occupants of single-family homes. An HO-3 protects the homeowner and their family from different types of damage.
HO-6 policies are designed for those who own condos. It protects them and their families against damage to their condo.
Property Coverage Differences
Because single-family homes and condos are very different types of properties — much like the differences between a condo vs duplex — the property coverage of an HO-3 differs from that of an HO-6.
HO-3 Property Coverage
A single-family home is a fully- or semi-detached structure, and it can be a traditional house, a rowhouse, a townhouse, or a duplex. Here’s what property an HO-3 covers for a single-family home:
• Damage to the home and any attached structures, such as an attached garage, porch, or deck. This is known as “dwelling coverage” or Coverage A.
• Damage to other structures on the property that are detached, such as a separate garage, fence, or shed. This is called Coverage B.
• Damage to personal property, both inside and outside the home. For example, if your laptop is stolen from a cafe, it’s covered the same way it would be if it were stolen from your home office. This is known as Coverage C.
An HO-3 policy also typically covers living expenses if damage covered by the policy makes your home unlivable. This includes temporary housing, food, and so on. This is known as “loss of use.”
HO-6 Property Coverage
In comparison, when you think about what a condo is, it’s a single, privately-owned unit that’s part of a community of such units. This is the property an HO-6 covers in a condo:
• Damage to the condo unit’s interior, including damage to any improvements, changes or additions you’ve made while living there. This is “Dwelling Coverage.”
• Damage to your personal property, such as furniture, electronics, and other belongings inside the unit — plus damage to your property when it’s outside the unit, such as when it’s in storage.
Like an HO-3, an HO-6 typically covers living expenses if damage covered by the policy makes your condo uninhabitable.
Liability Protection
If another person becomes injured on your property and it’s your fault (say they trip and fall over a cord on your patio), or you or anyone covered by your policy accidentally damages another person’s property or belongings, personal liability coverage can help cover it.
Both HO-6 vs HO-3 policies offer liability protection, although they are slightly different in scope. This is what they each cover.
HO-3:
• Offers personal liability for the entire dwelling plus any attached and detached structures, including fences and sheds.
• Also covers the land that is part of the owned property.
• Includes financial protection if another person is injured in or on your property and you are legally responsible, as well as medical payments for injuries to guests.
HO-6:
• Offers personal liability coverage for a condo unit from the walls inward. It covers anything that happens inside the unit, such as someone slipping and falling on the bathroom floor.
• Typically, it does not cover incidents that occur in common areas of the condo property, such as hallways or a pool, or outside the building; these are usually covered by a condo association’s master insurance policy.
• Liability coverage includes financial protection if another person is injured inside the condo unit and you are legally responsible for it, as well as medical payments for injuries to guests.
Structure vs. Interior Coverage
HO-3 insurance coverage is more comprehensive than HO-6 and covers the entire structure of a single-family home, as well as any attached and/or detached structures. This is known as dwelling coverage, and in an HO-3, it offers protection for the entirety of the structures, including:
• Roof
• Ceilings
• Walls
• Floors
• Windows
• Built-in appliances
HO-6 policies are considered “walls in” policies because they offer coverage for the interior of a condo unit only. While the coverage specifics you choose may depend on the type of master policy your condo association has, a homeowner’s HO-6 interior coverage generally includes:
• Walls from the drywall inward
• Floors
• Ceilings
• Fixtures (unless the master policy covers them)
• Built-in appliances (unless covered by the master policy).
Before you choose a specific HO-6 insurance policy, find out exactly what the condo association’s master policy covers (and doesn’t cover) so you can proceed accordingly.
What Do HO-3 and HO-6 Policies Have in Common?
An HO-3 and an HO-6 have a number of similarities. Both types of insurance offer coverage of personal property (like furniture, electronics, and clothing) from damage and theft, and personal liability coverage if a homeowner or other family member is legally responsible for injury or property damage to another person.
Additionally, HO-6 and HO-3 cover additional living expenses if damage makes a home uninhabitable, and both cover the interior structure of a home, including the walls, ceilings, and floors. However, while an HO-6 only covers the interior structure, an HO-3 covers the entire structure, which includes the roof and exterior walls.
How much homeowners insurance costs varies by the insurance type as well as the location, age, and size of your house, and the policy limits and deductible amounts you choose. Generally speaking, HO-3 policies cost more than HO-6 policies because they cover more.
To learn more about how to buy insurance coverage, check out our homeowners insurance guide.
When You Might Need an HO-3 Policy
If you own a single-family home and you’re looking for comprehensive coverage for the house, any other structures on your property, and your personal belongings, an HO-3 policy would likely be right for you. It protects your home and property against a wide range of perils, including fire, theft, vandalism, and storm damage.
An HO-3 also offers additional expenses coverage in the event that you can’t live in your home temporarily due to damage. And it offers personal liability protection if you’re held liable for another person’s injury or property damage, as well as medical expenses coverage to pay for another person’s injuries that happened in your home.
When You Might Need an HO-6 Policy
If you own a condo, the owner of your condo association will typically have a master insurance policy that protects the exterior structure. What you would likely need then is HO-6 insurance that covers the interior of the condo unit — the portion you actually own — which is everything from the walls inward, as well as your personal belongings. An HO-6 provides coverage against a named list of perils that usually include things like damage caused by burst pipes, fire and smoke damage, and theft.
Like an HO-3, an HO-6 policy also offers coverage for additional expenses, personal liability, and medical expenses.
The Takeaway
Choosing between an HO-3 vs an HO-6 insurance policy depends on the type of home you own. An HO-3 is for single-family homes, and an HO-6 is designed for those who own condos. While both types of policies have similarities, they differ in their scope of coverage. An HO-3 covers the exterior and interior of a single-family home, while an HO-6 covers only the interior of a condo.
Whatever type of homeowners’ insurance you need, putting the right policy in place can be instrumental in protecting one of your most valuable assets.
If you’re a new homebuyer, SoFi Protect can help you look into your insurance options. SoFi and Lemonade offer homeowners insurance that requires no brokers and no paperwork. Secure the coverage that works best for you and your home.
Find affordable homeowners insurance options with SoFi Protect.
FAQ
Does an HO-6 policy cover damage assessed by a condo association?
Depending on the specific policy, an HO-6 insurance policy may cover you from damage assessed by a condo association. This is known as loss assessment coverage, and it offers coverage for the cost of property damages to common areas like a lobby, and liability claims against the condo association that they may pass along to you (usually because their master insurance policy is insufficient to cover it all). While loss assessment is built into many HO-6 policies, it can be a good idea to check to see if your policy has it and to determine if the limit is high enough.
How does a condo master policy affect what an HO-6 covers?
A condo master policy typically covers the building’s structure, exterior, roof, and common areas. However, there are different types of condo master policies offering varying types of coverage; how much HO-6 coverage you need depends on what type of master policy your condo association has. For example, an “all-in” master policy covers all the fixtures in your unit, so you might need less dwelling coverage. However, with a “bare walls” master policy, you’ll likely need more dwelling coverage for appliances and fixtures.
Are personal property limits typically lower with an HO-6 policy?
Yes, personal property limits are usually lower with an HO-6 policy than with an HO-3. That’s because an HO-6 has less extensive coverage overall than an HO-3, which often leads to personal property limits being lower with the policy. Condo owners with expensive property like artwork or electronics may want to consider purchasing additional coverage.
Do lenders require different coverage limits for HO-3 vs. HO-6 policies?
Lenders do require different coverage limits for an HO-3 vs HO-6 because the two types of insurance policies cover different kinds of properties. For instance, because an HO-3 covers an entire dwelling, lenders usually require coverage that matches the full cost to rebuild the entire structure, inside and out. With an HO-6, lenders typically require “walls in” coverage limits for the interior of the unit, which tend to be lower.
How do deductibles differ between HO-3 and HO-6 policies?
With an HO-3 policy, homeowners generally have one deductible that applies to all covered damages to the house, any detached structures, and their personal property. With an HO-6, condo owners have a deductible for damage to the interior of their condo unit and their personal belongings. Depending on their HO-6 policy, they may also have a separate deductible that covers their share of the deductible of the condo association’s master policy for any damages that occur.
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