It can be confusing to understand what’s the difference between certain types of home insurance, such as HO-3 vs. HO-6 policy. Also, it can be overwhelming to ensure that you have the best insurance coverage. HO-3 policies cover traditional single-family homes, while HO-6 policies cover condos and some townhouses.
Purchasing an HO-3 policy is usually more expensive. This is because it covers the entire house as well as other structures, such as fences, pools, and detached garages. Also, condo insurance typically only covers the unit itself, not the roof or common areas. This article compares and contrasts HO-3 vs. HO-6 home insurance to help you determine the best policy.
HO-3 vs. HO-6 Home Insurance Policy: What’s the Difference?
If you own real estate, you probably want to purchase home insurance to safeguard your investment. You may come across two different kinds of home insurance policies: HO-3 coverage and HO-6 coverage. There are several significant differences between HO-3 vs HO-6 home insurance policy, even though both policies provide many of the same advantages.
Owner-occupied one- to four-unit family houses are the target market for HO-3 home insurance policies. Your items and the residence (home) are protected by HO-3 insurance. Furthermore, personal liability protection is offered by HO-3 plans. Conversely, an HO-6 policy is only designed and provided to owners of co-ops and condominiums.
This coverage only covers specific areas of the residence and the owner’s personal property because these units are in a jointly owned building. Additionally, personal liability protection is typically included in HO-6 plans. Here is some further information on each of these coverage categories as well as the differences between the HO-3 vs HO-6 home insurance policy.
What Is HO-3 Home Insurance Policy
The most common kind of home insurance is called an HO3 policy, which protects your house against typical dangers including theft, vandalism, windstorms, and fires. If you own a single-family house, you’ll need this kind of coverage, and your mortgage lender probably will too. Generally, this kind of policy provides six different kinds of coverage:
- Dwelling coverage: this protects the walls and roof of your house.
- Other structures: This includes fences and other structures on your land, including detached garages.
- Personal property: this includes items like clothing, furniture, gadgets, and more.
- Personal liability: Financial protection is offered by personal liability insurance if you are held accountable for the injuries or property damage of another individual.
- Additional living expenses: This covers costs for meals and lodging if a covered loss renders your house temporarily unusable, such as when a fire requires repairs.
- Medical payments: This pays (but may not always) for the costs of treating minor injuries that someone else sustains inside your house.
HO-3 insurance is the easiest way to safeguard your possessions from unforeseen catastrophes. These catastrophes include theft, fires, and natural disasters if you are a single-family homeowner.
What Is HO-6 Home Insurance Policy
HO6 insurance products are specifically developed for condominiums and some townhouses. To safeguard your property, if you own a condo or townhouse, you probably need an HO6 policy. Your condo association’s insurance policy typically only covers the building’s exterior and shared facilities, so you need coverage for your unit and personal belongings.
Generally, HO6 plans cover personal property, liability, and extra living costs if damage to your unit forces you to relocate temporarily. It’s crucial to thoroughly go over the details of your HO6 policy to determine what is and isn’t covered, just like with HO3 policies. You may also be covered for enhancements you make to your apartment under certain insurance.
Who Is HO-3 Home Insurance Policy Right For
There are several options accessible when selecting home insurance. An HO-3 policy is one of the most often chosen options. The HO-3 policy, which covers liabilities, detached structures, personal property, and the dwelling itself, is among the most comprehensive kinds of homeowner insurance.
Townhomes and single-family homes are among the several types of dwellings that can be covered by HO-3 policies. Furthermore, HO-3 insurance can be tailored to the specific requirements of the policyholder. Because of this, an HO-3 policy is a great option for people seeking extensive coverage at a reasonable cost.
Who Is HO-6 Home Insurance Policy Right For
A condominium homeowner’s policy, or HO-6 policy, is insurance created especially for condo owners. If you have this kind of policy, it will cover your personal belongings, liability, and the interior of your condo. The building and common areas are insured by your condo association’s master policy.
However, your personal items and liability protection in the event of an injury sustained in your unit are not covered. In addition, HO-6 coverage ensures you and your belongings are insured in case of an accident or disaster, addressing gaps in your coverage. Having the appropriate insurance is crucial to safeguarding both your investment and yourself, regardless of your experience level as a condominium owner.
HO-6 vs. HO-3 Insurance Policy Cost
Any home insurance policy’s price will vary depending on a variety of individual circumstances. These consist of items such as:
- Location.
- Your home’s age, condition, size, and design.
- Materials utilized in the building of the property.
- Any modifications or enhancements.
- Coverage amount.
- Any additional riders listed under the policy.
- Your credit score and any prior claims you have filed may also have an impact on your premiums.
Although your own homeowners’ insurance premiums may be affected by any of these factors, the average cost of an HO-3 policy in the United States in 2021 was $1,411. The average premium for an HO-6 policy during that same period was $531. However, condo and co-op owners often need to purchase collective homeowners association policies, which can increase their annual home insurance premiums.
Choosing between HO-3 vs. HO-6 Home Insurance Policy
The main difference between HO3 vs HO6 home insurance policy is that HO3 protects your house and all of its contents. Meanwhile, HO6 insurance only covers your possessions and any accidents that may occur on your land. Furthermore, there’s no need to insure the land or property because you don’t own it.
