What Coverage Gap Exists Between a Condo's Master Policy and an HO-6 Policy?
A condo owner often assumes the building’s master policy handles anything structural, while their own policy handles the rest. In practice, the line between the two isn’t always as clean as that assumption suggests, and the space where neither policy clearly applies is where real coverage gaps tend to show up.
The short answer
The coverage gap between a master policy and an individual HO-6 policy typically comes from a walls-in versus walls-out split: the master policy generally covers the building’s structure and shared areas, while the HO-6 policy covers interior improvements, personal property, and liability inside the unit. The exact dividing line depends on how the association’s governing documents and master policy define it, which is why the same event can be covered differently from one building to the next.
How the split is supposed to work
In most arrangements, condo insurance, often called an HO-6 policy, is designed to pick up where the master policy leaves off. The association’s master policy typically insures the building’s shared structure — the roof, exterior walls, common hallways and amenities — while the individual owner’s HO-6 policy covers what’s inside their unit: built-in fixtures, flooring, cabinetry, personal belongings, and liability for incidents inside the unit. That’s the general idea of walls-in coverage, though the specific boundary varies by association.
Where the gap actually opens up
The gap shows up in a few predictable places. Upgrades and improvements made by an owner — new flooring, custom cabinetry, renovated bathrooms — may not be covered by the master policy at all, and if the HO-6 policy’s improvement coverage limit doesn’t account for them, part of the loss may not be reimbursed by either policy. Personal property is almost never covered by a master policy, so an HO-6 policy with a low personal property limit can leave a real gap after a covered event like a fire or major water loss. Liability is another spot: the master policy generally covers liability tied to common areas, not liability an individual owner takes on inside their own unit.
Why the master policy’s structure matters here
Whether an association carries a bare-walls or an all-in master policy shifts this line significantly. A bare-walls policy pushes more of the interior, including original fixtures and finishes, onto the individual owner’s HO-6 policy, widening the gap an owner needs to personally insure against. An all-in policy covers more of the interior at the building level, narrowing that gap but not necessarily eliminating it, since personal property and liability generally still fall to the individual owner regardless of which structure the association uses.
How to spot a gap before it matters
- Compare the master policy summary against the HO-6 declarations page. Overlaps and gaps are usually easier to see side by side than described in general terms.
- Check improvement and betterment coverage limits. These limits are meant to cover upgrades beyond the unit’s original finishes, and a limit set too low is a common source of underinsurance.
- Review personal property and liability limits separately. Neither is typically addressed by the master policy at all.
- Ask what happens with loss assessments. A related but distinct gap involves how a master policy deductible can be passed on to owners through an assessment.
What to weigh
Coverage gaps between a master policy and an HO-6 policy are rarely obvious until a claim exposes them. Reading both documents together, rather than assuming they neatly divide the building down the middle, is generally the more reliable way for an owner to understand what’s actually protected and what isn’t.