What Is An HO-6 Form?
The HO-6 form is one of six different forms used for homeowners policies. Form HO-6 applies only to condominium and cooperative unit owners. It does not cover the dwelling and most other structures because unit owners typically do not own their dwellings or other structures on the premises. Although liability coverage offered through Form HO-6 (Coverages E and F) is similar to the liability coverage that appears in the other five forms, it's the property insurance coverage (specifically Coverages A and C) that makes HO-6 different.
Tip: The form number of your particular policy will usually be shown on the bottom right corner of every page. Use this resource as a learning tool, but always read your policy carefully to familiarize yourself with the details of your coverage.
Dwelling and Other Structures
As noted, Form HO-6 generally does not cover you for damage to your dwelling or other structures. There are several exceptions, however, because Form HO-6 does cover you for damage to:
- Building improvements, additions, and fixtures
- Areas of the building that you have exclusive rights to, like a balcony or private entranceway
- Property that is your insurance responsibility under the condo or co-op documents
- Structures you own on the premises, like a private garage
Coverage A of your policy covers you for damage to items like cabinets or carpets, even though they're not your personal property. However, for damage to an improvement, exclusive area, or privately owned garage to be covered, the damage must becaused by a named peril unless you purchase a special endorsement to your policy.
Tip: If you own a policy written on Form HO-6, pay particular attention to the paragraph titled "Loss Assessment" in Section I--Property Coverages. This paragraph entitles you to collect up to $1,000 for loss assessments charged to you by the condo or co-op association. Loss assessments typically result from losses suffered by the condominium as a whole, which are then passed through to all unit owners. All six forms contain a similar paragraph, but condo and co-op owners are the most likely recipients of loss assessments.
The HO-6 form provides coverage for 17 named perils:
- Fire or lightning
- Windstorm or hail
- Riot or civil disturbance
- Vandalism or malicious mischief
- Broken glass
- Volcanic eruption
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge or overflow of water
- Sudden and accidental tearing apart
- Artificially generated electrical damage
Like the other forms that cover you on a named perils basis (HO-2, HO-4, and the personal property section of HO-3), an HO-6 policy typically compensates you only for losses caused by any of these 17 named perils. If you wish to obtain more extensive coverage, you can purchase a special endorsement for the purpose of changing to open perils coverage.
Tip: Several kinds of endorsements can be added to the HO-6 form. A commonly added endorsement provides protection for unit owners who rent their unit to tenants rather than occupy it themselves.
If your homeowners policy is written on Form HO-6, your possessions are not covered by property insurance for damage or destruction caused by:
- Enforcement of building codes and similar laws
- Power failures
- Neglect (meaning your failure to take reasonable steps to protect your property)
- Nuclear hazard
- Intentional acts
The impact of these exclusions on your coverage can be easily seen:
Coverage under Form HO-6
Column A You're Covered for Damage Caused By
Column B You're Not Covered for Damage Caused By
Fire or lightning Windstorm or hail Explosion Riot or civil disturbance Aircraft Vehicles Smoke Vandalism or malicious mischief Theft Broken glass Volcanic eruption
Enforcement of building codes and similar laws Earthquakes Flooding Power failures Neglect War Nuclear hazard Intentional acts Any peril or cause not included in Column A
One of the Conditions in Section I of Form HO-6 describes the amounts you will receive for any losses covered by property insurance. Separate amounts are set for Coverages A (Dwelling) and Coverage C (Personal Property), as follows:
- For the property covered under Coverage A, there are two possible scenarios. If the damage is repaired or replaced within a reasonable time (as defined in the policy), you are entitled to receive the actual repair or replacement cost. If the damage is not repaired or replaced, you may receive the actual cash value of the property but no greater than the repair or replacement cost.
- For your personal property, you are entitled to receive the actual cash value of any damaged personal property but no greater than the repair or replacement cost of the property.
Loss settlement is always subject to the coverage limits described on the Declarations Page of your policy. This means you are never entitled to receive more than the coverage limit, even in cases where the actual cash value or replacement cost is a greater amount, unless you have increased your coverage limit by endorsement.
Caution: To qualify for payment from your insurance company, you must meet the conditions that are spelled out in your homeowners policy. Some conditions dictate your responsibilities before a loss occurs, and some dictate the actions you must take after the loss to remain eligible for coverage. Read your policy carefully to familiarize yourself with your responsibilities under the policy.
Form HO-6 has a unique feature not shared by any of the other policy forms. Although all six forms share a condition regarding losses covered by other insurance policies (in which case your homeowners insurance will pay only its proportionate share of the loss), Form HO-6 creates an exception for cases when the loss is covered by the condominium's or cooperative's master insurance policy. In those cases, your homeowners insurance will pay only for the balance of the loss that remains after the master insurance policy pays 100 percent of its limit. For example, let's say a fire starts in your condo's laundry room and spreads to your unit, damaging some of your property. In that case, your homeowners insurance will wait until you receive compensation under the master condominium policy. If that compensation compensates you for your full loss, your homeowners insurance will pay you nothing. However, if the master policy's payment to you is not sufficient to compensate you for your full loss, then your homeowners insurance will pay you (limited, as always, by your coverage limit).
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