California condo insurance (HO-6)

What the HOA policy covers - and what it does not

Your HOA master policy usually covers the building structure and common areas, but the split varies. Many are bare-walls-in, meaning everything from the drywall inward is your responsibility. An HO-6 fills that gap.

• Interior walls, floors, cabinets, and fixtures (per your HOA's coverage split)
• Personal belongings, including theft
• Personal liability and medical payments
• Loss assessment - your share of a covered loss charged by the HOA
• Loss of use if your unit is uninhabitable after a covered loss

Read your HOA's master policy first

Before setting limits, get your association's master policy declarations. Whether it is bare-walls, single-entity, or all-in changes how much dwelling coverage you need on your HO-6. We can help you interpret it.

What condo insurance costs in California

The average California HO-6 premium is 653 dollars a year, across roughly 1.05 million policy-years. That figure comes from the National Association of Insurance Commissioners, whose California data is supplied by the California Department of Insurance.

An HO-6 is rated mainly on your Coverage C personal property limit, since the association's master policy carries the building. Here is how the California average moves with that limit.

Notice that a condo policy costs roughly four times a renters policy at the same personal property limit. That is the loss assessment and interior-structure exposure an owner carries and a tenant does not - the part of an HO-6 people most often under-buy.

Loss assessment is the coverage owners forget

If a covered loss hits the common area and exceeds the association's master policy limit, the HOA can bill every owner for a share of the shortfall. That bill is a special assessment, and it can run into five figures.

Loss assessment coverage on your HO-6 responds to it, but the default limit is often only 1,000 or 5,000 dollars. In a California association facing a large fire, water, or liability loss - or an earthquake, if the master policy carries that coverage with a percentage deductible - that default will not go far.

• Ask what the master policy's deductible is; your assessment share of that deductible is a common exposure
• Raise loss assessment well above the default if your association's reserves are thin
• Check whether earthquake assessments are included or excluded, because that distinction matters enormously in California
• Re-check the limit after any large capital project or a change of master carrier

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