Understanding Gap Insurance (HO-6) for Condos and Townhomes
If you own a condo or townhome, your insurance needs look a little different than those of a traditional single-family home. That’s where an HO-6 policy—sometimes called “walls-in” coverage or gap insurance—comes in.
What Your HOA’s Master Policy Covers
Your homeowners association (HOA) typically carries a master insurance policy that covers the structure and shared areas: roofs, exterior walls, hallways, landscaping, and other community spaces. However, the master policy doesn’t usually extend to the interior of your unit.
Depending on the HOA’s policy type, the association may only insure:
The bare structure (studs-out), not interior finishes like flooring, cabinets, or fixtures
Or, in some cases, limited finishes — but still not your personal property or liability
What an HO-6 Policy Covers
Your HO-6 policy fills that gap. It protects the parts of your home that the HOA policy doesn’t:
Interior finishes (walls, flooring, cabinetry, lighting, etc.)
Built-in appliances
Personal belongings and furniture
Personal liability (for example, if a guest is injured inside your unit)
Loss of use (help with temporary living expenses if your condo becomes uninhabitable)
The Importance of Loss Assessment Coverage
One optional but highly recommended add-on to your HO-6 policy is Loss Assessment Coverage.
Here’s a real-life example:
Imagine a Colorado hailstorm damages the roof of your condo complex. Since most units share a roof, the HOA’s master policy would typically cover the roof replacement because it falls under the building’s “studs-out” structure. However, the deductible on that master policy—often tens of thousands of dollars—is shared among all unit owners.
If there are 20 units and the HOA’s deductible is $100,000, that’s $5,000 per owner. Without loss assessment coverage, you’d be responsible for paying your share of that deductible out of pocket.
With Loss Assessment Coverage, your insurance can help cover that cost for you. It steps in when the HOA issues an assessment to homeowners for covered losses—such as storm damage, liability claims, or shared deductibles—so you’re not left footing a huge, unexpected bill.
Why It Matters
Without HO-6 coverage, a pipe burst, fire, or other major damage could leave you paying out of pocket for interior repairs—even if the HOA’s master policy covers the building. And without Loss Assessment coverage, you could be responsible for large community repair costs that fall back on owners.
Together, these coverages protect both your personal space and your financial stake in the entire property.
A Quick Tip
Ask your HOA or property manager for a copy of the master policy so your insurance agent can tailor your HO-6 coverage accordingly. Every community’s policy is different, and the right coverage depends on exactly where the HOA’s responsibility ends and yours begins.