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HO6 Policy-What is it & Do you need it?

HO6 Policy-What is it & Do you need it?

This week a friend of mine informed me of a terrible situation they were recently put under, they bought a townhome for $80,000, they recently just had a fire that started from the outside shed and went into the home.  There was $70,000 worth of damage, the townhome is nearly totaled.  Because the fire came into the home and the damage was mainly on the inside the HOA does not cover the damage on the inside of the walls, they only cover the outside structure of the townhome.  When this couple bought the townhome, HO6 policies were not required.  They do not have an HO6 insurance policy to cover the inside of the walls, and they are choosing to walk away from the property.  What would you do?  What if this was your rental property and this happened to your renters?  Are you covered?

So what exactly is an HO6 Insurance Policy? This is an insurance policy that is now required for condos and/or townhomes purchases.  The policy covers “walls in”, meaning everything on the inside of the walls are covered if anything should happen to your home.  The HOA has a blanket policy that covers the structure of your condo/townhome, meaning that if there were a fire, the outside of the structure is covered.

An H06 policy on average costs around $300 annually.  Wouldn’t that be worth getting and paying instead of losing your home?  With the new guidelines today, if you are buying a condo and/or townhome it is required.  We have many clients who fight us on this and don’t see the necessity, but ultimately they lose because if you want the property, you have no choice but to get the policy.  But really in the grand scheme of things, why wouldn’t you want it?

If you are a condo/townhome owner and you don’t have an HO6 policy in place I highly recommend calling your insurance agent and adding this policy.

If you have any questions please give me a call or send me an email, I am always here to help!  If you would like to complete a secure online loan application click here.  For more info on an HO6 policy click here.


Ray Williams

Branch Manager

Summit Mortgage Corporation

303-779-0591 ext. 101

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