Condo Insurance in Florida: HO-6 and Loss Assessments

When you own a condo unit, you do not insure the whole building. The association carries coverage for the common property, and you carry a separate policy for what is inside your walls and what you are responsible for. The gap between those two policies is where most surprises happen, especially after a storm or a big repair bill.

Key takeaways

  • A unit owner policy, often called an HO-6, is a separate policy from the association’s master coverage.
  • Florida requires unit owner policies to include at least $2,000 of loss assessment coverage for a covered loss, with a deductible of no more than $250.
  • Loss assessment coverage responds to assessments tied to a covered loss, not to every special assessment an association may levy.
  • Your declaration of condominium decides who insures what, so read it before you choose limits.

Two policies, two jobs

The association’s master policy generally protects the building and common areas, but how far it reaches into your unit depends on the declaration. Some associations insure walls and fixtures up to the drywall, others insure less. Your own policy fills in what is left: your personal belongings, interior improvements and finishes you are responsible for, liability if someone is injured in your unit, and additional living expenses if the unit is unlivable after a covered loss.

Before you settle on coverage amounts, ask the association or property manager for a copy of the master policy summary and the declaration. Your agent can then match your limits to what the association does not cover.

What loss assessment coverage does

If a covered event damages common property and the association’s insurance does not pay all of it, the association can assess owners for the difference. Under Florida Statutes section 627.714, unit owner policies must include at least $2,000 of property loss assessment coverage for all assessments from the same direct loss, with a deductible of no more than $250. That floor is small. A tree-fall, fire or storm claim on a large building can produce an assessment well above it, so ask your agent about higher limits.

The statute also says a unit owner’s policy is excess over any other coverage on the same property, which is another reason to understand the master policy.

Why repair assessments are a different question

Florida now requires older and taller condo buildings to fund reserves for structural items and to complete milestone inspections. When those reports show that repairs are needed, the association may pay for them through higher fees, a special assessment or a loan. Those assessments come from maintenance and reserve needs, not from a covered loss, so loss assessment coverage typically does not respond. Ask your agent to confirm exactly what your policy language says rather than assuming.

That is why reading the reserve study before you buy matters. If you are also arranging a mortgage, see how lenders review condo projects and what they look for in the association’s finances.

Checklist for condo buyers and owners

  • Read the declaration to see where the association’s coverage ends
  • Request the master policy summary and the deductible, including any hurricane deductible, that applies to the association
  • Choose personal property and interior limits that match what you would actually need to replace
  • Raise loss assessment coverage above the statutory minimum if the building is large
  • Keep liability limits high enough for a unit with neighbors above and below
  • Confirm whether the unit is owner-occupied or rented, since that changes the policy type

Our unit owner coverage options page explains how to request a quote, and you can ask us about unit owner coverage specifically.

Condo insurance questions

Does my lender require an HO-6?

Many lenders require proof of coverage on the unit at closing. Ask your loan officer what they need.

Does the association’s policy cover my flooring and cabinets?

It depends on the declaration and the master policy. This is the question to settle before closing, not after a claim.

Can I rely on the minimum loss assessment amount?

That is a minimum, not a recommendation. Talk through your building’s size and history with an agent.

This article is general information, not a coverage guarantee. Terms vary by policy. For help, call Quality RE Insurance at 407-476-6667.