Financing in 95120>Question Details

Mv288, Home Owner in San Jose, CA

any recommendation for HO-6 Policy provider.?

Asked by Mv288, San Jose, CA Wed Mar 2, 2011

I need to obtain one for refinancing. Although the HOA master coverage is pretty good, the lender requires one for refinance. Also can you give me idea of the price for a 500K town home

0 votes Share Flag Financing in 95120

Help the community by answering this question:


Hi Mv288,

An HO-6 policy covers the interior fixtures of the townhouse which are not covered by the master policy. Although it is unlikely you needed this when you bought your house, lenders are now requiring them. You can contact any insurance company, Allstate, State Farm, Farmers, etc. to get a policy. I might recommend you begin with your auto insurance company as they will often offer a discount for two policies.

As for coverage requirements, you need 20% with most lenders. Therefore, for a $500,000 home, you would need $100,000 worth of coverage. This should cost you about $375 - $500 per year.

Hope this helps.


David M. Setti
Branch Manager
TurnKey Mortgage Solutions
2 votes Thank Flag Link Wed Mar 2, 2011
Hello Mv and thanks for your post.

The HOA industry has ALWAYS (at least for the entire 25 years that I've been in this industry) required that homeowners purchase their own insurance, called an HO-6 policy. It has not been until recently that the mortgage companies began requiring this same insurance policy.

To determine how much coverage you require, you'll need to define for your insurance agent WHAT you actually own. For example, if you own a condominium, then you don't own the building at all, so the coverage is based only on the interior improvements inside your home and the personal property you own. If the townhome is a unit a planned development, then you actually own the building and the land, so the coverage you'll be required to purchase will include a portion of the value of the home. Your insurance agent, however, will be able to determine the amount and type of coverage you'll need for your mortgage company.

I might add, as an HOA consultant, that even though you're first learning of this coverage in your refinance, you MUST MUST MUST have this policy in place for your home at all times. In other words, you cannot cancel the policy after the first year. An HO-6 policy will provide coverage to your home when you sustain any damage that is not covered by the Association's policy. Remember, the deductible for most HOA policies START at $5000 per occurrence, so even if there is coverage for any damages in your home, you (as the owner) will be responsible for at least the first $5000 (and possibly a whole lot more) of the cost, which can be covered by your HO-6 policy. The same holds true for anyone who slips, falls or injures themselves in your home--there's no coverage from the Association's policy for these types of liabilities.

To determine the type of coverage you'll need as well as the cost, you must talk with a licensed insurance agent. Typically, however, the cost is relatively inexpensive and most of my clients tell me that they pay only a few hundred dollars for the coverage for their condominium homes. Contact your favorite insurance agent (start with the individual who provides you with car insurance) for pricing and assistance.

Good luck!!

Grace Morioka
Area Pro Realty-People's Choice
1 vote Thank Flag Link Wed Mar 9, 2011
If you can save the expense, save it. Fannie Mae guidelines are clear that..."If the master or blanket policy does not cover the unit's interior, then the borrower must obtain a “walls-in” policy, commonly known as an HO-6 policy." I'm guessing most lenders will actually not require a mandatory "individual" policy if included in the master policy. With that said, you may have to challenge your lender by having them dig deep into their very own guidelines to confirm it's ok.
1 vote Thank Flag Link Thu Mar 3, 2011
You are required to have an individual policy with 90% of the lenders out there. Liberty Mutual is good
1 vote Thank Flag Link Thu Mar 3, 2011
in my experience, most lenders require EITHER the HOA master policy provide HO-6 walls in coverage OR that the individual owner purchase an individual policy. Check the master policy to see if this coverage is already provided. I've seen some that already do. You might be pleasantly surprised.
1 vote Thank Flag Link Wed Mar 2, 2011
HI Mv288,

Many lenders now are requiring their borrowers obtain an HO6 policy since some master HOA policies do not cover the interior (stud walls in) - this includes flooring, interior walls, kitchens, bathroom, etc. You will need to carefully read through your HOA policies to make sure that it does not cover the interior. Insurance companies premiums will vary.

The lenders require 20% but you want to make sure that if the place burns down that you have enough coverage to rebuild your place.

You are more than welcome to get a quote from me. I am an independent broker which I can provide several companies to compare with.

Michelle Lin
Insurance Broker
Red Wave Insurance Services
Web Reference:
1 vote Thank Flag Link Wed Mar 2, 2011
You should know what the master policy covers to determine the coverage needed. A good agent will want to see the master policy to ensure there are no gaps and things like how much coverage is needed for loss assessment, what's covered by the master policy and what exposures you may have. It's a good idea to package your home with auto and other insurance to maximize any multiple policy discounts. In Minneapolis, MN the average is around $200 to $300 a year.
0 votes Thank Flag Link Sun Jul 19, 2015
LIsa Penney at State Farm in Los Gatos is awesome (408) 354.1145. She's done many of these for my clients and has never dissapointed. Knowledgable and competitive pricing, super friendly with terrific service. Tell her Gary sent you and she'll roll out the red carpet for you.
0 votes Thank Flag Link Fri Aug 2, 2013
An HO6 policy is like a regular homeowner’s policy, but for a condominium unit, and with a lot more extras. HO6 insurance policies cover the interior of the unit and personal property inside–commonly known as “walls in” coverage. The average HO6 insurance policy protects the interior of your condominium from dangers such as hail, fire, civil disturbance, theft, explosions, falling objects, smoke and many other liabilities. The requirement may vary by lender, but in general you need to cover the finishes in your unit.

0 votes Thank Flag Link Fri Dec 14, 2012
If anyone in your family has been in the military I highly recommend USAA. Otherwise State Farm and Farmers are good. If you have a big deductible you can keep the cost down.
0 votes Thank Flag Link Fri Nov 11, 2011
You will want to look into an HO-6 Policy. There's a clause in there that helps with HOA Assessed fees if a common area (or a major part of the HOA) is damaged and the board decides to assess the repairs. Also, the HOA master doesn't include your loss of use, which means if you were displaced, you have to pay room and board out of pocket.
Web Reference:
0 votes Thank Flag Link Fri Nov 11, 2011
I am having trouble finding HO6 insurance in Michigan. This would be for a condo in a ski resort where we have the condo in the rental program. Looking for an insurance company in Michigan that has HO6 policies. Condo is in Boyne Falls, Michigan.
0 votes Thank Flag Link Fri Nov 11, 2011
Hi Mv288
Thanks for sharing that your home is valued at 500k.
Generally, you would want a HO-6 coverage of at least half that value to replace your
Home items as well as be able to rebuild the place in the event of a fire.

I would be surprised if you are being asked to get a 500k policy.
Be sure the insurance company you go with is AAA or AA rated.

Good luck.
0 votes Thank Flag Link Tue Mar 8, 2011
Hi Mv288,

Dave Setti, answered your question perfectly. Think of the HO-6 policy as contents. Your condo coverage covers the unit exterior and common, your Ho-6 policy covers your walls in. This includes cabinets, floors, etc. Your current provider can assist you. Or you can

call Laura Peterson
State Farm
1 408.348.3318MOBILE
1 408.395.2900LAND
Web Reference:
0 votes Thank Flag Link Wed Mar 2, 2011
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