Buying a condo means buying into two insurance policies at once. The association carries a master policy on the building, funded through your monthly dues, and you carry your own policy on the unit — a form the industry calls the HO-6. Where one stops and the other starts is written into the association’s declarations, not left to guesswork, and getting it wrong shows up on the worst possible day. Here is how to read the seam.

What the master policy covers

The master policy insures what the owners collectively own: the roof, the exterior, hallways, elevators, lobbies and the other common elements. How far it reaches into your unit depends on which of three structures the association chose, and the Washington State Office of the Insurance Commissioner lays them out cleanly:

  • All-in. The master policy covers the exterior and all interior finishes — doors, windows, cabinets, vanities, showers and tubs, paint, trim, light fixtures and floor coverings. Your policy mainly needs to cover belongings, liability and the master deductible.
  • All-in, excluding improvements and betterments. Original finishes only. The builder-grade kitchen is covered; the quartz counters and hardwood the last owner installed are yours to insure.
  • Bare walls, or walls-out. The association covers the structure up to the unfinished drywall and subfloor, plus everything outside the unit. Every finish inside — flooring, cabinets, fixtures, even the paint — is on your policy.

Under all three, the unit owner is responsible for the master policy’s deductible when a loss touches their unit, and that deductible can be large. Ask the association for the master policy’s declarations page and its deductible before you close, not after.

What your HO-6 covers

An HO-6 has six working parts: dwelling coverage for the parts of the unit you are responsible for, personal property, loss of use if a covered loss makes the unit unlivable, personal liability, medical payments for guests hurt in your unit, and loss assessment. The base amounts are small. Wisconsin’s insurance regulator notes that a standard HO-6 usually provides $1,000 of building coverage, liability of usually $100,000 and medical payments of usually $1,000 per person, with higher limits available at extra cost.

That $1,000 of building coverage is the number to fix first. Under a bare-walls master policy, rebuilding a kitchen and two bathrooms after a fire runs far beyond it, so the dwelling limit should equal what it would cost to restore every finish you own at today’s prices. Contents should be insured at replacement cost rather than depreciated value, and the liability limit deserves the same attention it gets on a single-family policy: a guest’s fall or an overflowing tub that ruins the unit below is exactly what it is for.

Loss assessment: the coverage condo owners skip

When the master policy’s deductible, or a loss it does not fully cover, exceeds what the association has on hand, the board can assess every owner a share of the bill. The standard ISO unit-owners form pays up to $1,000 toward an assessment charged against you for direct damage to collectively owned property by a peril your own policy would cover, with earthquake and ground movement excluded. A thousand dollars is a rounding error on a roof replacement split among a few dozen units. Ask your insurer to raise the loss-assessment limit by endorsement; the right amount depends on the master deductible and the size of the building, and it is one of the cheaper lines on the policy relative to what it can absorb.

What your lender requires

If you finance the purchase, the lender has its own rules. Fannie Mae’s Selling Guide, updated August 5, 2026, requires an individual HO-6 whenever any part of the unit’s interior or improvements is not covered by the master policy, or whenever the master policy carries a per-unit deductible. The HO-6 must cover at least the greater of what it would cost to restore the uncovered interior and improvements or the per-unit deductible, on a replacement-cost basis, and its deductible may not exceed the greater of 5% of the coverage amount or $2,500. The master policy itself must cover the common elements and residential structures with a deductible of no more than 5% of coverage; a per-unit deductible alternative is capped at $50,000 and requires unit owners to carry their own policies. Expect your lender to ask for proof of coverage before closing.

What it costs

Condo insurance is cheaper than a single-family homeowners policy because the building is insured elsewhere. The countrywide average HO-6 premium was about $660 a year in 2023, the latest data published by the National Association of Insurance Commissioners, and it climbs with the amount of building coverage: policies written for under $10,000 averaged $422, policies in the $100,000 to $124,999 range averaged $776, and policies at $200,000 or more averaged $1,928. Bare-walls buildings push owners toward the higher bands because there is simply more interior to insure.

The levers that lower the bill are the ones that work on any home policy: bundle it with your auto policy, which the Insurance Information Institute says typically earns a 5 to 15 percent discount on a homeowners policy; raise the deductible to a level your emergency fund can carry, within your lender’s ceiling; and reshop every couple of years. The full list is in our 2026 guide to saving on homeowners insurance, and the deductible trade-off gets its own treatment in how to use a high insurance deductible.

Before you close

  • Get the master policy’s declarations page and find out which of the three structures it uses and what its deductible is. The bylaws and declarations, not the listing agent, are the authority on what the association covers.
  • Price your interior. Under bare-walls or improvements-excluded coverage, estimate what it would cost to redo the finishes and set your dwelling limit there.
  • Raise the two small numbers — loss assessment and building coverage — from their $1,000 defaults.
  • Inventory your belongings with photos and receipts, and insure them at replacement cost.

Talk to an agent as soon as your offer is accepted. The HO-6 is one of the smaller checks you will write on the purchase, and it is the one that decides whether a pipe burst upstairs costs you a deductible or a kitchen.