Michigan condo insurance (HO-6), built around your master deed

What does an HO-6 condo policy cover?

An HO-6 condo policy covers the parts of your unit the association’s master policy leaves to you, usually from the studs in: interior walls, flooring, ceilings, cabinets and fixtures. It also covers your personal belongings, improvements you have made, additional living expenses if the unit becomes unlivable after a covered loss, personal liability, medical payments for injured guests, and your share of association loss assessments.

How do I know how much unit coverage my condo needs?

Start with your association’s master deed, bylaws and master policy. They define whether the association insures only the bare structure, the structure plus original fixtures and finishes, or nearly everything inside the unit. Your HO-6 dwelling limit should cover whatever the documents leave to you, including every upgrade you or a prior owner made. Without that review, it is easy to buy too little and pay for upgrades a second time.

What we look for when we read your association documents:

• Which master policy type the association carries (bare walls, original specifications or all-in).
• The master policy deductible, and whether the bylaws pass it to the unit where a loss starts.
• Who is responsible for pipes, fixtures, windows and balconies serving only your unit.
• Any insurance requirements the bylaws place on unit owners.

Our Renters & Condo page compares the three master policy types side by side.

• Renters & Condo Insurance — Master policy types compared, plus renters coverage

How much loss assessment coverage should a condo owner carry?

Your loss assessment limit should be at least as large as the share of the association’s master-policy deductible you could be charged, plus room for an assessment after a major common-area loss or a liability claim that exceeds the association’s limits. Default loss assessment limits on HO-6 policies are often low. Comparing the limit to your association’s actual deductible and bylaws is the only reliable way to set it.

• Deductible assessments. Many associations charge their deductible back to owners, sometimes to the unit where the damage began.
• Common-area damage. A roof, clubhouse or shared system loss can be split among all owners.
• Liability shortfalls. A judgment against the association above its limits may be assessed to owners.

Who pays when water leaks from one condo unit into another?

It depends on the master deed and bylaws, where the water started, and whether anyone was negligent. A burst pipe or overflowing appliance in the unit above can damage several units, and the association’s master policy, the upstairs owner’s HO-6 and your own HO-6 may each respond to part of the loss. If your unit coverage and loss assessment limits are too low, you may be left paying the difference yourself.

• Your unit damaged by a neighbor’s leak. Your HO-6 typically pays for your interior and belongings, and your insurer may pursue the responsible party.
• Your leak damages a neighbor. Your liability coverage may respond if negligence was involved, and the bylaws may assign the association’s deductible to you.
• Sewer or drain backup. Excluded unless you add a water backup endorsement.
• Flood. Excluded on condo policies; it requires a separate flood policy.

• Flood Insurance — How NFIP and private flood coverage work

What affects the price of condo insurance in Michigan?

Michigan insurers price condo policies on similar factors, though each weighs them differently. The most common are the unit’s location, the replacement cost of what you insure, the building’s construction and roof, your claim history, your deductible and limits, any gaps in your insurance history, fire department access and hydrant proximity, available discounts, and your insurance score. Coverage choices, not just the carrier, drive much of the difference.

Because we work with multiple carriers, we compare how each one treats your unit and your association’s master policy, then explain the trade-offs between limits, deductibles and price.