Do You Have the Wrong Condo Insurance Policy? | Blog

Question 2: Do you know whether your building has a  master condo policy
 — or if you’ve been quoted homeowners (HO3) policy
 by mistake?

In this message, we’ll explain the  difference between HO3 and HO6 policies
, why it matters, and how to make sure  you and your unit
 are fully protected.

1. A  Condo Master Policy
    (held by the association)
2. An  HO6 Condo Policy
    (carried by you, the unit owner)

But here’s where problems happen — especially during purchase or refinance:

Sometimes, a quote or existing policy is written as an  HO3 (homeowners) policy
, which is meant for standalone, single or multi family homes
 — not attached units like condos.

• An HO3 assumes  you’re responsible for the entire building
  , including the roof, exterior, and other units — which isn’t true in a condo setting.
• If your lender receives an HO3 instead of verifying a master condo policy + HO6, it could lead to  closing delays
  ,  over-insurance
  , or  coverage gaps
  .
• Worse, if there’s a claim, you could end up paying for damage  the master policy should have covered
   — or vice versa.

• The  association
   has to carry a  master condo policy
   (often referred to as a “walls-in” or “all-in” policy, depending on what’s covered).
• You, the  unit owner
  , should carry an  HO6 condo policy
   to protect:
  • Interior walls and upgrades (if the master policy stops at bare walls)
  • Personal property
  • Loss of use (if you’re displaced)
  • Personal liability
  • Loss assessment from the condo association

Everything might seem fine — until it isn’t. The  biggest risk with having the wrong policy (like an HO3 on a condo)
 is that you may not know it’s a problem…  until you file a major claim
.

At that point, the insurance company can deny the claim, stating that the wrong type of policy was in place for the property type. That means  tens or hundreds of thousands of dollars in uncovered losses
 — all because the setup was wrong from the start.

Don’t let a paperwork mistake become a financial disaster. Let us review your policy now — not after a loss.

If you’re living in or buying a condo and your policy says  HO3
, there’s a good chance it’s not the right fit.

Let  Vargas & Vargas Insurance
 help you sort it out. We specialize in  properly structuring condo insurance
, whether you’re an owner, trustee, or part of a homeowners association.

Let’s eliminate confusion — and get you covered the right way the first time.